Coinbase Extends $100M Bitcoin-Backed Credit Facility to Riot Platforms

Riot Platforms Secures $100 Million Bitcoin-Collateralized Credit Facility from Coinbase

Riot Platforms (RIOT), a leading Bitcoin mining company, has finalized a $100 million credit agreement with Coinbase Credit, using its Bitcoin holdings as collateral to secure the funds. This deal will help Riot with short-term financing to fuel its expansion without the need to issue additional shares.

The company revealed in a statement that it intends to draw on the credit facility over the next two months. With 19,223 BTC currently in its possession, valued at over $1.8 billion, Riot is tapping into its Bitcoin reserves to maintain growth while preserving shareholder value.

“We’re excited about this credit facility as it strengthens our efforts to diversify our financing options and ensures continued support for our strategic initiatives, all while maximizing long-term value for our shareholders,” said Jason Les, CEO of Riot Platforms.

The loan is structured with a variable interest rate, starting at 7.75% annually. The rate is calculated based on the greater of 3.25% or the upper bound of the federal funds rate, plus 4.5%. The facility has a term of 364 days, though Riot can extend it for another year, subject to Coinbase’s approval.

The credit line is secured against a portion of Riot’s Bitcoin reserves, and the funds will be used for strategic growth initiatives and general corporate purposes.

Coinbase has been active in offering similar loans. Semler Scientific (SMLR), a healthcare tech company, announced just last week that it too had reached an agreement with Coinbase for a loan backed by its Bitcoin holdings. Additionally, Hut 8 (HUT), another Bitcoin mining firm, has used Coinbase’s Bitcoin-backed credit facilities in the past.