Riot Platforms, a prominent player in the Bitcoin mining industry, has recently acquired 5,113 BTC for a total of $510 million.
As per a post on the social media platform X (formerly Twitter) dated December 13, the company disclosed that the Bitcoin purchase was made at an average price of $99,669 per BTC, inclusive of fees and associated costs.
Following this acquisition, Riot’s Bitcoin holdings have surged to 16,728 BTC, currently valued at approximately $1.68 billion based on the current market price of $100,303.
This positions Riot among the top three public holders of Bitcoin, surpassing companies like Tesla and others. Consequently, Riot’s share price saw a 10% increase to $13.39 after the announcement.
Debt Financing Strategy
Riot financed this purchase using the proceeds from its recent $525 million convertible bond issuance, featuring a 0.75% coupon rate.
This funding approach mirrors the strategy pioneered by MicroStrategy, which began acquiring Bitcoin in 2020 to enhance shareholder value.
Several companies are now utilizing private offerings and debt financing to bolster their Bitcoin reserves, offering investors an avenue to gain exposure to digital assets.
Matthew Sigel, head of digital assets research at VanEck, highlighted that the top 14 Bitcoin miners have collectively raised over $4 billion in recent months, utilizing these funds to strengthen their financial positions, acquire new mining equipment, and expand AI-driven data center hosting capabilities.
AI Integration
Interestingly, Riot’s Bitcoin purchase coincides with reports suggesting that Starboard Value, an activist investor holding a substantial stake in the company, recommended allocating a portion of its mining capacity to AI.
Riot’s CEO, Jason Lens, acknowledged increasing demand from organizations seeking substantial power capacity for long-term agreements.
Industry observers speculate that repurposing a portion of Riot’s infrastructure to cater to both Bitcoin mining and AI computing could offer a more stable revenue model. This dual-purpose strategy may help mitigate the volatility of crypto markets while tapping into the growing demand for AI services.
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