Riot Platforms unveils plans to strengthen its Bitcoin holdings through a $500M convertible senior notes offering, while recent mining operations show increased hash rate capacity despite lower November production.
Riot Platforms Inc. (NASDAQ: RIOT), a leading cryptocurrency miner based in the United States, has announced a plan to strengthen its Bitcoin BTC $84 237 24h volatility: 0.1% Market cap: $1.67 T Vol. 24h: $8.03 B strategy. The company revealed on Monday, December 9, that it intends to offer $500 million convertible senior notes due by January 15, 2030. The $4.3 billion company announced that it will offer the initial private investors a three-day option to purchase an additional $75 million of the notes.
The company disclosed that the funds will be used to acquire additional Bitcoins, as well as for general corporate purposes.
Market Impact on Riot Platforms
Following the announcement, the RIOT stock market dropped nearly 10 percent to trade about $11.67, during the mid-morning New York session on Monday, December 9.
Moreover, the $500 million capital raise to purchase more Bitcoins means that existing outstanding shares will be diluted further in the near future.
Nonetheless, the company has registered an impressive growth in the past three months of about 72 percent. The Bitcoin notable growth in the past two years compared to traditional investment products has helped RIOT shares grow even further in the long haul.
Last week, Riot Platforms noted that its daily average Bitcoin production increased to 16.5 BTC units in November, compared to 16.3 units in October.
Consequently, Riot Platforms closed November with more than 11,425 Bitcoins, worth over $1.1 billion at the current exchange rate of about $98k. Notably, the company reported a total of 495 BTC units mined in November, which was a 10 percent decline from the previous month.
Nonetheless, Riot Platforms announced a 5 percent growth in its hash rate capacity of about 30.8 exahashes per second (EH/s). The company’s Bitcoin mining operations are in central Texas and Kentucky.
Bigger Picture
The adoption of Bitcoin by institutional investors has significantly bolstered the ongoing bullish outlook. As Coinspeaker noted, the overall supply of Bitcoin on centralized exchanges has been declining in the past year. In the past 30 days, the supply of BTC on CEXes has declined by over 94k units to reach a multi-year low of about 2.25 million.
The success of MicroStrategy Inc. (NASDAQ: MSTR), which now holds about 423,659 BTC, has significantly influenced other companies around the world to follow the same path. Moreover, countries around the world – led by the Royal Government of Bhutan and El Salvador – are moving towards adopting a strategic Bitcoin reserve.
For instance, the re-election of President-elect Donald Trump in the United States was heavily impacted by his Bitcoin plan for the country. Among his many promises, Trump noted the United States will have a Bitcoin stockpile if elected in office.
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