Riot Platforms, the Bitcoin mining giant, has bolstered its cryptocurrency reserves by adding over 5,000 new coins recently. This substantial investment follows mounting pressure from activist investor Starboard Value, who has been urging changes within the company.
### Riot Platforms’ Current Bitcoin Reserves
On December 13th, Riot Platforms revealed it spent approximately $510 million to acquire Bitcoin between December 10th and 12th. According to their announcement on X, the average cost per Bitcoin, including all associated fees, came to about $99,669.
The funding for this major acquisition was drawn from the proceeds of Riot’s recent 0.75% convertible bond issue, set to mature in 2030, along with some of its cash reserves. This move has increased Riot’s total Bitcoin holdings to 16,728 coins, which is valued at roughly $1.68 billion.
Interestingly, this significant purchase comes on the heels of a disappointing third quarter for Riot Platforms, in which they suffered a net loss of $154.4 million. The loss was attributed to rising operational costs and unrealized investment losses.
With the proceeds from our recent $525 million convertible bond issue at a 0.75% interest rate, we have acquired 5,117 BTC at an average cost of $99,669. As a result, Riot has boosted its total BTC reserves to 16,728, now valued at…
@RiotPlatforms) December 13, 2024
The swift acquisition underscores a growing trend of institutional interest in cryptocurrencies witnessed throughout 2024. Big players like MicroStrategy are also ramping up their Bitcoin reserves, catching the eye of prominent investors.
Not to anyone’s surprise, Riot’s stock (RIOT) saw a jump of over 7%, climbing to around $13.28. This trend aligns with what we’ve seen with MicroStrategy’s shares (MSTR), where companies consistently increasing their Bitcoin holdings often experience a rise in share prices, largely due to the growing Bitcoin market.
As of this update, Bitcoin’s price hovers around $101,257, marking a slight 1% bump in the last 24 hours. Yet, as per CoinGecko, Bitcoin has dipped about 2% over the past week.
### The Motivation Behind Riot’s Bitcoin Purchase
This strategic purchase by Riot Platforms comes in the wake of news about Starboard Value acquiring a stake in the company. Reports from the Wall Street Journal indicate that Starboard has been pushing Riot to transform some of its mining capabilities to support artificial intelligence models. Investing in Bitcoin remains one of the primary avenues for miners like Riot to reassure and satisfy their investors.
Bitcoin’s daily price movement, as shown in this chart from TradingView. Featured image courtesy of iStock, chart via TradingView.
