Riot Secures $100M Credit Line From Coinbase Using Bitcoin Holdings

Riot Platforms, a prominent Bitcoin miner, has secured a $100 million credit line from Coinbase’s credit arm. This agreement allows Riot to use its Bitcoin holdings as collateral to obtain short-term funding for its ongoing expansion efforts. The publicly traded mining firm announced that it plans to draw on this facility over the next two months. Riot currently holds 19,223 BTC, valued at over $1.8 billion, which provides a substantial collateral base for the credit line. This financing method enables Riot to avoid issuing new shares, thereby maintaining its current share structure.

According to Riot’s CEO, Jason Les, this credit facility is a strategic move to diversify financing sources. The goal is to support operations and strategic growth initiatives, ultimately aiming to create long-term value for stockholders. The loan, issued by Coinbase Credit, features a variable interest rate. Borrowers will pay at least 7.75% annually, calculated as the greater of 3.25% or the federal funds rate upper bound, plus 4.5%. The loan term is 364 days, with an option for Riot to seek a one-year extension if Coinbase agrees.

The credit facility is secured by a portion of Riot’s total Bitcoin reserves. The funds obtained through this facility will be used to pursue key strategic initiatives and for general corporate purposes. This move aligns with Riot’s broader strategy to leverage its Bitcoin holdings to support its growth and operational needs. Coinbase has been actively engaging in similar deals, having recently provided a Bitcoin-backed loan to healthcare technology firm Semler Scientific. Additionally, another Bitcoin miner, Hut 8, has previously utilized a Bitcoin-backed credit facility with Coinbase.