Riot Platforms has modified its $200 million credit agreement with Coinbase Credit, as disclosed in an 8-K filing. This amendment replaces the variable interest rate with a fixed one, providing greater predictability in costs. Meanwhile, the company continues to scale back its bitcoin holdings, marking a strategic shift towards artificial intelligence and high-performance computing infrastructure.
As of Tuesday, Riot held 15,680 BTC, down from 19,368 BTC at the beginning of the year, according to bitcoin treasuries.net. The revised agreement maintains the loan size and collateral structure, with the credit facility secured by Riot's bitcoin, USDC, and cash held in Coinbase Custody. However, the loan's maturity has been extended by 364 days, with the option to extend it by an additional year, subject to the lender's approval.
The loan operates under a loan-to-value framework, which may necessitate additional collateral if bitcoin's price drops significantly. Under this framework, a top-up is triggered if the loan-to-value ratio exceeds 70%, and liquidation occurs at 80%.
Consequently, Riot may continue to deplete its bitcoin reserve if the cryptocurrency's price remains weak, potentially funding its pivot into AI and HPC. On Tuesday, Riot's shares plummeted by approximately 9% to below $17, with the company's Q1 earnings report scheduled for April 30.