Riot Platforms bolsters Bitcoin reserves with $510 million purchase

Riot Platforms, a leading Bitcoin mining company, has acquired 5,113 BTC for $510 million.

According to a Dec. 13 post on the social media platform X (formerly Twitter), the company said the Bitcoin was bought at an average price of $99,669 per BTC, including fees and related expenses.

With this acquisition, Riot’s Bitcoin holdings have surged to 16,728 BTC. At the current market price of $100,303, these holdings are valued at approximately $1.68 billion.

This places it among the top three public holders of the flagship digital asset, ahead of electric car manufacturer Tesla and others.

Riot’s share price climbed 10% following the announcement to $13.39, as of press time.

Debt financing

Riot funded the purchase from the proceeds of its recent $525 million convertible bond issuance, which carried a 0.75% coupon.

This strategy mirrors the approach pioneered by MicroStrategy, which began acquiring Bitcoin in 2020 to maximize shareholder value.

Many companies are now using private offerings and debt financing to increase their Bitcoin reserves, offering investors a way to gain exposure to digital assets.

Notably, Matthew Sigel, head of digital assets research at VanEck, highlighted that the top 14 Bitcoin miners have raised over $4 billion in recent months.

He noted that these funds are being used to bolster financial positions, acquire new mining equipment, and expand AI-driven data center hosting capabilities.

AI pivot?

The timing of Riot’s Bitcoin purchase coincides with reports that Starboard Value—an activist investor with a significant stake in the company—advised the miner to allocate part of its mining capacity to AI.

Riot’s CEO Jason Lens noted growing demand from organizations seeking large-scale power capacity for long-term agreements.

Observers noted that repurposing some of the company’s infrastructure to serve Bitcoin mining and AI computing could offer Riot a more stable revenue model. This dual-purpose approach could help offset the volatility of crypto markets while tapping into the booming demand for AI services.

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