Riot Platforms Acquires 5117 Bitcoin with $525 Million Senior Offering

Highlights:

• Riot has expanded its Bitcoin reserves by acquiring 5117 BTC through a $525 million bond issue to boost growth. 
• The $525 million bond offering provides Riot with long-term capital while avoiding shareholder dilution. 
• Companies like MARA and MicroStrategy also use debt to increase Bitcoin holdings as a financial hedge.

Riot Platforms has acquired 5,117 Bitcoin using the net proceeds from a $525 million convertible bond issue. The purchase occurred at an average price of $99,669 per Bitcoin. Consequently, Riot now owns a total of 16,728 Bitcoin, worth approximately $1.68 billion. This is based on the current market price of Bitcoin which is $100,303. With this move, Riot shows a commitment to increase its cryptocurrency reserves.

With the net proceeds from Riot’s recent $525 million, 0.75% coupon convertible bond issue, the Company has acquired 5,117 BTC at an average price of $99,669 per BTC, inclusive of fees and expenses. As a result, Riot has increased its holdings to 16,728 BTC, currently valued at… pic.twitter.com/Fi6x5hnNDR

— Riot Platforms, Inc. (@RiotPlatforms) December 13, 2024

Financial Strategy for Growth

Riot Platforms raised $525 million in a senior note offering. The notes have a 2030 maturity and a 0.75% coupon rate. The offer raised $511.5 million in net proceeds. The advantage of convertible bonds is they convert to common stock at a future date.

This financing method enables Riot to get secure long term capital at a relatively low interest rate. Riot uses the bond issue to support its strategy of raising capital without the immediate need to dilute shareholder value. This move will help Riot to take advantage of good market conditions while remaining financially stable in the long term.

Other Companies Boost Bitcoin Holdings

Other companies have taken similar financial steps to strengthen their Bitcoin holdings. MARA Holdings recently bought 11,774 Bitcoin for over $1.1 billion. This brings their Bitcoin holdings up to 40,435 BTC, worth roughly $3.9 billion.

In addition, MARA Holdings also crossed a major threshold by becoming the first public Bitcoin miner to achieve a hashrate of 50 exahashes per second (EHs).

MARA Holdings just upped their Bitcoin game with a $1.1B purchase, pushing their hashrate to an unprecedented 50 EH/s! #Bitcoin #CryptoMining #MARA #DigitalAssets pic.twitter.com/WiQVBLf5DA

— Bitcoin Desk (@Bitcoin_Table) December 11, 2024

Another example is MicroStrategy. Between Dec. 2 and Dec. 8, 2024, the company purchased 21,550 Bitcoin at an average cost per Bitcoin of $98,783. The acquisition cost was about $2.1 billion. This latest purchase brings MicroStrategy’s total Bitcoin holdings to 423,650 BTC, valued at almost $41.5 billion. In the last five weeks, MicroStrategy’s Bitcoin purchases have totaled 171,430 BTC.

The company financed the purchases with debt and the sale of shares including a $21 billion equity offering authorized in October 2024. The moves by businesses such as MARA Holdings and MicroStrategy represent a growing trend for businesses to use Bitcoin as a financial hedge.

Expansion in Crypto Mining

The company has raised huge amounts of money through both equity and debt. Riot uses these funds to strengthen its mining infrastructure and to increase its Bitcoin holdings. For instance, in 2022, Riot raised substantial capital through an equity offering and used the funds to purchase new mining equipment, improving operational efficiency.

The recent $525 million bond issue forms part of Riot’s ongoing strategy. This approach helps the company avoid immediate shareholder dilution while preparing for future growth. Riot has effectively utilized the funds from past offerings, contributing to its current position as a leader in the cryptocurrency mining sector.

More companies will continue to buy Bitcoin in the future. The USA is gearing up for a Bitcoin strategic reserve. This will drive demand and push the price higher. The trend highlights Bitcoin’s growing recognition as a valuable financial asset.