Riot Secures $100M Bitcoin-Backed Credit Facility From Coinbase

Riot Platforms, Inc., a prominent Bitcoin mining firm, has announced a significant financial move by securing a $100 million credit facility from Coinbase Credit, Inc., a subsidiary of Coinbase Global. This agreement marks Riot’s first bitcoin-backed credit facility and is designed to support the company’s ongoing growth strategy. The facility provides Riot with a multiple drawdown term loan totaling up to $100 million, which will be made available over a two-month period following the execution of the agreement.

The funds will be used to support key strategic initiatives and general corporate activities. Riot CEO Jason Les highlighted the benefits of this financing approach, stating that it provides non-dilutive funding at an attractive cost, thereby preserving shareholder value. The loan structure allows Riot to draw on the facility as needed, with all borrowed amounts accruing interest at an annual rate based on the greater of the federal funds rate or 3.25%, plus an additional 4.50%. The facility is set to mature 364 days from the Effective Date, with an option for Riot to request an extension for another 364 days, subject to Coinbase’s approval.

As part of the agreement, Riot will secure the loan with a portion of its bitcoin holdings, reflecting a growing trend of institutional bitcoin-backed financing. This approach allows the company to leverage its digital assets without issuing new equity, thereby avoiding shareholder dilution. The move underscores Riot’s commitment to financial innovation and operational expansion within the digital asset mining space. As the mining industry faces increased competition and capital demands, this financing approach offers Riot both liquidity and resilience.

In addition to this financial maneuver, Riot Platforms has been exploring revenue diversification into artificial intelligence (AI) and high-performance computing (HPC). In February, the company announced its plans to pursue potential partnerships within the AI and HPC sectors, adapting its infrastructure for AI applications as Bitcoin network transactions hit a 12-month low. This strategic shift demonstrates Riot’s proactive approach to staying competitive in a rapidly evolving market.

Overall, the $100 million credit facility from Coinbase Credit, Inc. represents a significant step forward for Riot Platforms in its efforts to diversify financing sources and support long-term growth. By leveraging its bitcoin holdings and exploring new revenue streams, Riot is positioning itself for sustained success in the digital asset mining industry.