Bitcoin miner Riot Platforms has entered into a $100 million credit agreement with Coinbase, using its BTC holdings as collateral.
According to the firm, the facility will be accessed through staged withdrawals over two months until the full $100 million is drawn. Riot confirmed that the capital will support expansion efforts and other corporate priorities.
The loan terms include an annual interest rate based on the higher federal funds rate upper limit or 3.25%, plus an additional 4.5%. The credit line matures in 364 days, but Riot can request an extension for another year, pending Coinbase’s approval.
The facility is unique in its structure because Riot leverages its sizable Bitcoin treasury, currently totaling 19,233 BTC, worth nearly $1.8 billion, as collateral. The holdings make the firm one of the largest corporate Bitcoin holders in the world.
Riot Platforms CEO Jason Les said:
“Riot has entered into its first Bitcoin-backed facility, which provides us with non-dilutive funding at an attractive cost of financing. This credit facility is a key part of our efforts to diversify sources of financing to support our operations and strategic growth initiatives, with a view towards long-term stockholder value creation.”
Bitcoin miners face headwinds
While Riot explores new funding options, the broader mining industry faces serious challenges. A recent Bitwise report outlines two major issues confronting miners, especially those in the US.
According to the report, US tariffs on mining equipment imported from Vietnam, Thailand, and Malaysia have significantly increased hardware costs. These import duties range from 24% to 46%, making upgrades costly and cutting profit margins.
At the same time, mining difficulty, a measure of how hard it is to mine a block, has surged to record highs. As a result, hashprice, a key indicator of miner earnings, has dropped to around $48, down from over $60 earlier in the year.
Adding to the challenge, investor focus is gradually moving elsewhere. The rising popularity of Bitcoin exchange-traded funds (ETFs) and corporate treasury holdings firms like Strategy and Metaplanet, which offer simpler exposure to the top crypto, has resulted in waning interest in BTC mining stocks.
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