Riot Platforms Signs $100 Million Bitcoin-Backed Credit Deal with Coinbase

Riot Platforms (RIOT) has secured a $100 million credit line with Coinbase’s credit division, leveraging its Bitcoin holdings as collateral. This arrangement provides Riot with short-term financing for expansion and growth without the need to issue new shares.

The mining company stated that it plans to tap into the credit line over the next two months, utilizing the funds for strategic projects and corporate operations. Riot currently holds 19,223 BTC, worth more than $1.8 billion, which will serve as security for the credit facility.

“We view this credit facility as an important part of our efforts to diversify our financing strategy, enabling us to continue supporting our operations and strategic initiatives, with the goal of delivering long-term value for our stockholders,” said Jason Les, CEO of Riot Platforms.

The loan, which is provided by Coinbase Credit, carries a variable interest rate. The minimum rate is set at 7.75% annually, calculated as the greater of 3.25% or the upper limit of the federal funds rate, plus 4.5%. The credit term lasts for 364 days, with the possibility of a one-year extension, subject to Coinbase’s approval.

Riot’s credit facility is secured against a portion of its Bitcoin holdings, and the funds will be used to support its corporate strategies and growth initiatives.

This deal follows similar actions by Coinbase in recent months. Semler Scientific (SMLR), a healthcare company, also entered into a similar arrangement last week, borrowing funds backed by its Bitcoin reserves. Additionally, Hut 8 (HUT), another Bitcoin mining company, has previously used Coinbase’s Bitcoin-backed lending services.