- Riot’s $500 million sale aims to increase its Bitcoin holdings.
- The use of convertible debt to buy Bitcoin is becoming more prevalent in company planning.
Major Bitcoin infrastructure company Riot Platforms made an announcement today on its offering of $500 million convertible senior notes. The deal is available to accredited institutional investors, with an add-on purchase option of up to $75 million in three days from the primary transaction. The company would utilize the proceeds for increasing its BTC holdings and general corporate purposes.
Convertible notes are probably the most popular financing tool, allowing investors to convert debt into shares of the issuing company. It is a very attractive form of financing for investors seeking equity while enabling companies to raise substantial capital without diluting ownership early on.
Bitcoin Funding Trend on the Rise
The latest move by a company focused on bitcoins to raise convertible debt for buying bitcoins is that of Riot. A little while back, another Bitcoin miner, Marathon Digital Holdings, raised $850 million in addition to an option of $150 million more, taking the firm’s BTC balance to above $3.3 billion. Metaplanet, a firm from Japan, also got above $45 million to use for buying bitcoins through sales of shares.
The growingly recognized overall confidence in Bitcoins as corporate assets and, not to forget, an alternative for hard cash comes with an increasing acknowledgment of Bitcoins as an asset class. Interest from corporations in making this strategic reserve also grows.
Michael Saylor, MicroStrategy’s founder, is the first to use convertible debt to buy Bitcoin. Many corporations have followed in his footsteps. Saylor’s transformation from a skeptic to a strong advocate of Bitcoin has set an industry precedent. Most people view Bitcoin as a potential global reserve asset.
The latest move by Riot emphasizes its commitment to Bitcoin, positioning the company at the forefront of the cryptocurrency ecosystem. As Bitcoin’s supply is capped and competition for it increases, long-term potential companies like Riot bet on it to become a store of value.
At this time when the price of Bitcoin is going up, the miners will be able to add to their reserve and cash in on rising market demand. Riot would hence be placed as the most significant Bitcoin holder in the publicly listed companies and further solidify its position in the market.
