TLDR
- CleanSpark secured two separate $100 million credit facilities in the same week
- Both facilities are backed by the company’s Bitcoin holdings without requiring share dilution
- Total collateralized lending capacity now stands at $400 million
- Funds will be used for data center expansion, increasing Bitcoin hashrate, and scaling computing infrastructure
- CleanSpark holds nearly 13,000 BTC on its balance sheet, making it the ninth-largest public Bitcoin holder
Bitcoin mining company CleanSpark has secured two separate $100 million credit facilities in the same week, both backed by its substantial Bitcoin holdings. The company announced on Thursday a new facility with Two Prime, an institutional Bitcoin yield platform, following another $100 million arrangement with Coinbase Prime announced earlier in the week.
The latest deal brings CleanSpark’s total collateralized lending capacity to $400 million, providing the company with greater financial flexibility for expansion. What makes these facilities stand out is that they’re non-dilutive, meaning the company won’t need to issue new shares that would reduce existing shareholders’ stakes.
CleanSpark plans to use the funds to expand its data centers, increase Bitcoin hashrate capacity, and scale its high-performance computing infrastructure. This capital deployment strategy allows the company to grow operations while maintaining its Bitcoin treasury.
“We have a range of exciting opportunities to maximize current megawatts in our portfolio, accelerate potential development of high-performance compute campuses, and further invest in our digital asset management strategies,” said CleanSpark CEO Matt Schultz. “This financing supports CleanSpark’s continued evolution across all business segments.”
Bitcoin as Financial Collateral
The use of Bitcoin as collateral highlights a growing trend in cryptocurrency mining and finance. By leveraging their Bitcoin holdings instead of selling them, mining companies can access capital while preserving their exposure to potential Bitcoin price appreciation.
CleanSpark currently holds nearly 13,000 BTC on its balance sheet, making it the ninth-largest public Bitcoin holder according to BitcoinTreasuries.NET. As of June, the company’s Bitcoin treasury was valued at over $1 billion.
This approach to financing represents an evolution in treasury management for Bitcoin miners. Rather than immediately selling mined Bitcoin to cover operating costs, more miners are now holding Bitcoin and using it as collateral for loans.
For companies with large Bitcoin reserves, this strategy can sometimes be more cost-effective than traditional debt financing while avoiding triggering capital gains taxes that would result from selling Bitcoin.
Industry Trend
CleanSpark isn’t alone in this approach. Other major Bitcoin miners are adopting similar strategies. Riot Platforms, which holds more than 19,300 BTC, secured its own $100 million credit facility from Coinbase Prime earlier this year, marking its first Bitcoin-backed loan.
The largest Bitcoin miners, including Marathon Digital, CleanSpark, Riot Platforms, and Cango, all maintain substantial Bitcoin holdings on their balance sheets, positioning them to take advantage of Bitcoin-backed financing options.
CleanSpark reached 50 EH/s of operational hashrate in June, according to its latest earnings report. The company operates multiple data centers across the United States, strategically positioned in markets with favorable electricity pricing.
As of Thursday, CleanSpark’s shares were down 2.5% to $14.15, according to price data from The Block.
The new financing arrangements come as Bitcoin-backed loans gain traction beyond the mining sector, with some investors using them to purchase real estate without selling their BTC holdings.
