Riot Platforms, a prominent Bitcoin mining firm, has procured 5,113 BTC for $510 million.
As per a December 13 update on the social media platform X (previously known as Twitter), the organization stated the Bitcoin was acquired at an average cost of $99,669 per BTC, inclusive of fees and other expenditures.
This acquisition has propelled Riot’s Bitcoin inventory to 16,728 BTC. At the present market rate of $100,303, these assets are estimated to be worth around $1.68 billion.
This positions it among the leading three public owners of the premier digital currency, surpassing electric vehicle maker Tesla and others.
Following the announcement, Riot’s stock value rose by 10% to $13.39, as of the time of writing.
Debt financing
Riot financed the acquisition through the revenue from its recent $525 million convertible bond issuance, which featured a 0.75% coupon.
This tactic reflects the methodology initiated by MicroStrategy, which commenced acquiring Bitcoin in 2020 to enhance shareholder wealth.
Numerous firms are now utilizing private placements and debt financing to expand their Bitcoin holdings, providing investors a method to gain access to digital assets.
Importantly, Matthew Sigel, head of digital assets research at VanEck, pointed out that the top 14 Bitcoin miners have accumulated over $4 billion in recent times.
He remarked that these resources are being utilized to strengthen financial standings, acquire new mining apparatus, and enhance AI-driven data center hosting capabilities.
AI pivot?
The timing of Riot’s Bitcoin acquisition aligns with reports that Starboard Value—an activist investor with a substantial stake in the company—recommended the miner to allocate a portion of its mining capacity to AI.
Riot’s CEO Jason Lens observed an increasing demand from entities seeking large-scale power capacity for long-term contracts.
Analysts suggested that reallocating some of the company’s infrastructure for both Bitcoin mining and AI computing could provide Riot with a more stable revenue stream. This dual-function strategy could help mitigate the unpredictability of cryptocurrency markets while capitalizing on the surging demand for AI services.
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