Bitcoin (BTC) miner Riot Platforms (RIOT) has struck a $100 million credit agreement with Coinbase's credit arm

Bitcoin (BTC) miner Riot Platforms (RIOT) has struck a $100 million credit agreement with Coinbase's credit arm, using bitcoin as collateral to secure short-term funding

Bitcoin (BTC) miner Riot Platforms (NYSE:RIOT) has secured a $100 million credit agreement with Coinbase (NASDAQ:COIN) to provide short-term funding for its ongoing expansion.

The publicly traded mining firm said it plans to draw on the facility over the next two months. The deal provides Riot, which currently holds 19,223 BTC valued at over $1.8 billion, with a line of credit without the need to issue new shares.

“This credit facility is a key part of our efforts to diversify sources of financing in order to support our operations and strategic growth initiatives, with a view towards long-term stockholder value creation,” said CEO Jason Les.

The loan, issued by Coinbase Credit, carries a variable interest rate. Borrowers will pay at least 7.75% per year, calculated as the greater of 3.25% or the federal funds rate upper bound, plus 4.5%. The loan term is 364 days, with an option for a one-year extension subject to Coinbase's approval.

The credit facility is secured by a portion of Riot's total bitcoin reserves. The firm said it will use the funds “to pursue key strategic initiatives and for general corporate purposes.”

Coinbase has been engaging in several similar deals recently. Last week, healthcare technology firm Semler Scientific (NYSE:SMLR) announced reaching an agreement with Coinbase for a cash loan secured by its bitcoin holdings.

Hut 8 (TSX:HUT) (New York: HUT) has also utilized a bitcoin-backed credit facility with Coinbase in the past.