Bitcoin mining company Riot Platforms has significantly expanded its Bitcoin holdings. As of December 12, they had purchased 5,117 BTC for a value of $510 million. This deal, at an average price of $99,669 per Bitcoin, brings Riot’s total Bitcoin ownership to 16,728 BTC.
The deal was funded through revenue from 0.75% convertible notes due 2030 and the company’s available cash.
Riot Holds a Total of 16,728 BTC
The acquisition Riot’s recent Bitcoin move reflects a broader trend of viewing the largest cryptocurrency as a strategic reserve asset. The strategy is in line with recent moves by other companies and governments.
MicroStrategy, a pioneer in using Bitcoin as a corporate treasury reserve, currently holds more than 423,650 BTC. Since November, the company has made more than $15 billion worth of BTC purchases.
Similarly, Marathon Digital has accumulated 40,435 BTC, positioning itself as another leader in digital asset mining and holding.
Governments are also exploring Bitcoin as a reserve currency. Pennsylvania has introduced the Bitcoin Strategic Reserve Act, proposing to allocate up to 10% of its $7 billion in state funds to Bitcoin.
Texas is considering allowing tax payments in Bitcoin, while Bhutan has been quietly mining Bitcoin since 2019, accumulating more than 12,000 BTC. Just this week, the city of Vancouver passed a Bitcoin reserve proposal, and a Russian lawmaker filed a similar proposal in Moscow.
These examples demonstrate growing confidence in Bitcoin’s ability to serve as a store of value and protect against inflation. A 2024 study found that there is empirical evidence to support this view, but as adoption increases, its ability to store value may gradually decrease.
“The results, based on monthly data from August 2010 to January 2023, show that Bitcoin returns increase significantly after a positive inflationary shock, confirming empirical evidence that Bitcoin can acts as an inflation hedge. However, we find that Bitcoin’s inflation protection property is sensitive to the price index – it only holds for CPI shocks – and for the period of analysis – the main protection property originates mainly from sample periods before BTC had significant adoption (“early days”). Therefore, the inflation-protected nature of Bitcoin is context-specific and may weaken as adoption increases.” writes researcher Harold Rodriguez.
Still, Riot Platforms’ decision to devote significant resources to holding Bitcoin shows confidence in the cryptocurrency’s future and strategic fit with the global trend toward digital reserve assets. .
In a closely related development, activist investor Starboard Value has acquired a large stake in Riot Platforms. Starboard is calling on Riot to convert some of its Bitcoin mining facilities into large-scale data centers to serve large-scale computing customers.
Riot has acknowledged ongoing discussions with Starboard, noting their work to enhance shareholder value.
