Riot Platforms Strengthens Bitcoin Reserves with $510 Million Purchase

Bitcoin miner Riot Platforms has significantly expanded its BTC holdings. As of December 12, it acquired 5,117 BTC for $510 million. This purchase, at an average price of $99,669 per Bitcoin, brings Riot’s total holdings to 16,728 BTC.

The acquisition was funded through proceeds from the company’s 0.75% convertible senior notes due 2030 and existing cash reserves.

Riot’s Bitcoin Holdings Reach 16,728 BTC

Riot’s recent Bitcoin acquisition reflects a broader trend of treating the largest cryptocurrency as a strategic reserve asset. This strategy aligns with recent market plays made by other companies and governments recently.

MicroStrategy, a pioneer in using Bitcoin as a corporate treasury reserve, currently holds over 423,650 BTC. Since November, the firm has made over $15 billion worth of BTC purchases.

Similarly, Marathon Digital has accumulated 40,435 BTC, positioning itself as another leader in the mining and holding of digital assets.

Governments are also exploring Bitcoin as a reserve currency. Pennsylvania introduced the Bitcoin Strategic Reserve Act, which proposes allocating up to 10% of its $7 billion state funds to Bitcoin.

Texas is considering legislation to allow tax payments in Bitcoin, while Bhutan has been quietly mining Bitcoin since 2019, amassing over 12,000 BTC. Just this week, the city of Vancouver passed a Bitcoin reserve proposal, and a Russian lawmaker filed for a similar proposal in Moscow.

These examples illustrate a growing confidence in Bitcoin’s ability to serve as a store of value and an inflation hedge. A 2024 study suggests that there is empirical evidence supporting this notion, but as adoption increases, its store of value may dwindle.

“The results, based on monthly data between August 2010 and January 2023, indicate that bitcoin returns increase significantly after a positive inflationary shock, corroborating empirical evidence that Bitcoin can act as an inflation hedge. However, we observe that bitcoin’s inflationary hedging property is sensitive to the price index – it only holds for CPI shocks – and to the period of analysis — the hedging property stems primarily from sample periods before the increasing institutional adoption of BTC (“early days”). Thus, the inflation-hedging property of Bitcoin is context-specific and is likely to be diminishing as adoption increases.” wrote researcher Harold Rodriguez.

Nonetheless, Riot Platforms’ decision to dedicate substantial resources to Bitcoin holdings signals confidence in the cryptocurrency’s future and its strategic alignment with a global shift toward digital reserve assets.

In a closely related development, activist investor Starboard Value has acquired a significant stake in Riot Platforms. Starboard is advocating for Riot to repurpose some of its Bitcoin mining facilities into hyperscale data centers to serve large-scale computing clients.

Riot has acknowledged ongoing discussions with Starboard, noting their work on enhancing shareholder value.