Riot Platforms, a Bit miner, has significantly expanded its BTC holdings. As of December 12, it acquired 5,117 BTC for $510 million. This purchase was at an average price of $99,669 per Bitcoin, increasing Riot's total holdings to 16,728 BTC.
This acquisition was funded through a 0.75% convertible note due in 2030 and existing cash holdings.
Riot's Bitcoin Holdings Reach 16,728 BTC
Riot's recent acquisition of Bit reflects a broader trend of companies and governments treating the largest cryptocurrency as a strategic reserve asset. This strategy aligns with recent market moves by other firms and governments.
MicroStrategy, a pioneer in using Bit as a corporate treasury reserve asset, currently holds over 423,650 BTC. Since November, the company has purchased over $1.5 billion worth of BTC.
Similarly, Marathon Digital has accumulated 40,435 BTC, positioning itself as another leading player in the Bit mining and holding space.
Governments are also exploring Bit as a reserve currency. Pennsylvania has introduced a Bit strategic reserve bill that proposes allocating up to 10% of the state's $7 billion in funds to Bit.
Texas is considering a bill to allow tax payments in Bit, and Bhutan has quietly mined over 12,000 BTC since 2019. This week, the City of Vancouver passed a Bit reserve proposal, and a Russian lawmaker submitted a similar proposal in Moscow.
These examples demonstrate an increasing trust in Bit's ability to serve as a store of value and inflation hedge. A 2024 study suggests empirical evidence supports this, but the role as a store of value may diminish as adoption increases.
"The results based on monthly data from August 2010 to January 2023 indicate that Bit returns significantly increase after positive inflation shocks, providing empirical evidence that Bit can act as an inflation hedge. However, Bit's inflation-hedging property is sensitive to the price index and applies only to CPI shocks, varying across the sample period. The hedging property mainly stems from the pre-institutional adoption sample period ("early stage"). Therefore, Bit's inflation-hedging property is context-dependent and may decrease as adoption increases," wrote researcher Harold Rodrigues.
Nevertheless, Riot Platforms' substantial resource allocation to holding Bit reflects confidence in the future of cryptocurrencies and strategic alignment with the global shift towards digital reserve assets.
Closely related, activist investor Starboard Value has acquired a significant stake in Riot Platforms. Starboard is urging Riot to convert some of its Bit mining facilities into hyperscale data centers for large computing customers.
Riot acknowledged ongoing discussions with Starboard and said it is working to enhance shareholder value.
