Key Points
- Riot Platforms Inc. plans to raise over $500 million through a private offering to purchase more Bitcoin.
- The funds raised will also be used for general corporate purposes.
Riot Platforms Inc., a prominent US-based cryptocurrency miner, recently unveiled a plan to bolster its Bitcoin strategy. The company intends to raise $500 million through convertible senior notes due by January 15, 2030.
The corporation, valued at $4.3 billion, announced that initial private investors would have a three-day option to buy an additional $75 million of the notes.
Use of Funds and Market Impact
Riot Platforms stated that the funds raised would be used to buy more Bitcoins and for general corporate purposes.
Following the announcement, the RIOT stock market fell by nearly 10 percent to trade around $11.67 during the mid-morning New York session on Monday, December 9.
The capital raise to buy more Bitcoins could lead to further dilution of existing outstanding shares in the future. Despite this, the company has seen impressive growth of about 72 percent over the past three months.
Riot Platforms reported that its daily average Bitcoin production increased to 16.5 BTC units in November, up from 16.3 units in October.
Bitcoin Holdings and Future Outlook
By the end of November, the company held more than 11,425 Bitcoins, valued at over $1.1 billion at the current exchange rate of about $98k. The company mined a total of 495 BTC units in November, a 10 percent decrease from the previous month.
However, Riot Platforms reported a 5 percent growth in its hash rate capacity, now at approximately 30.8 exahashes per second (EH/s). The company’s Bitcoin mining operations are located in central Texas and Kentucky.
The increasing adoption of Bitcoin by institutional investors has significantly contributed to the ongoing bullish outlook. The overall supply of Bitcoin on centralized exchanges has been decreasing over the past year.
MicroStrategy Inc., which now holds about 423,659 BTC, has greatly influenced other companies worldwide to follow suit. Furthermore, countries around the world, led by the Royal Government of Bhutan and El Salvador, are moving towards adopting a strategic Bitcoin reserve.
The re-election of President Donald Trump in the United States was heavily influenced by his Bitcoin plan for the country. Among his many promises, Trump noted that the United States would have a Bitcoin stockpile if he was elected to office.
