Key Points
- Riot Platforms plans to issue $500 million in convertible senior notes to fund Bitcoin purchases.
- Increasing number of companies are using shares to fund Bitcoin acquisitions, including Marathon Digital Holdings and Metaplanet.
Riot Platforms, a Bitcoin infrastructure company, has proposed a plan to issue debt securities. The goal is to fund Bitcoin purchases and finance other corporate activities.
Riot’s Funding Plan
The company intends to offer $500 million in convertible senior notes via a private offering to accredited institutional investors. Along with the initial investment, investors will have an option to purchase an additional $75 million within three days.
Convertible notes are debt instruments that give share rights to buyers. These notes can be converted into ownership units in a publicly traded company.
According to a statement released by Riot on December 9, the net proceeds from this offering will be used to acquire more Bitcoin (BTC).
Increasing Trend of Funding Bitcoin Purchases
Riot is part of a growing list of companies that are funding Bitcoin purchases by offering shares. Marathon Digital Holdings, another Bitcoin miner, recently increased its note sale to $850 million, taking its total Bitcoin assets above $3.3 billion.
Metaplanet, a Japanese investment giant, holds over $45 million in Bitcoin, primarily financed by selling shares.
The National Center for Public Policy Research, a global think tank, has urged Amazon to include Bitcoin in its corporate reserves. This suggestion was supported by Changpeng ‘Cz’ Zhao, the founder of Binance, who also proposed that Amazon should add Bitcoin as a payment option.
Other firms such as China’s SOS Limited and Genius Group have also adopted the securities debt capital raise concept, originally introduced by Michael Saylor, the founder of MicroStrategy.
Saylor, who transitioned from a crypto-skeptic to a Bitcoin advocate, believes that Bitcoin will capture a larger share of global cash reserves in the upcoming years. Supporters of Bitcoin, including the executive chairman of MicroStrategy, have urged U.S. authorities to establish a strategic national Bitcoin reserve.
It is speculated that a race for Bitcoin’s dwindling supply among countries has already begun. This comes especially after the U.S. elections indicated a regime change under the pro-Bitcoin President-elect Donald Trump.
