TLDR
- CleanSpark secured $100 million Bitcoin-backed credit facility with Two Prime, second deal this week
- Total collateralized lending capacity now reaches $400 million across both facilities
- Non-dilutive financing preserves shareholder value using 13,000 BTC treasury as collateral
- Funds target data center expansion, hashrate growth, and high-performance computing infrastructure
- Company ranks as ninth-largest public Bitcoin holder with over $1 billion treasury value
CleanSpark has secured a $100 million Bitcoin-backed credit facility with Two Prime, marking the second major financing deal this week for the prominent Bitcoin mining company. The arrangement uses CleanSpark’s substantial Bitcoin treasury as collateral without requiring new share issuance.
The Two Prime facility operates independently from CleanSpark’s expanded Coinbase Prime credit line announced earlier this week. Together, these agreements bring the company’s total collateralized lending capacity to $400 million, providing substantial financial flexibility for growth initiatives.
CleanSpark currently holds approximately 13,000 Bitcoin on its balance sheet, positioning the company as the ninth-largest public Bitcoin holder. The treasury reached a value exceeding $1 billion by June 2024, reflecting both accumulated mining rewards and strategic Bitcoin purchases.
Strategic Non-Dilutive Financing Approach
The Bitcoin-backed credit structure represents a non-dilutive financing strategy that preserves existing shareholder value. Traditional equity fundraising through share offerings can reduce ownership percentages for current investors, making collateralized lending an attractive alternative.
By leveraging its Bitcoin holdings as security, CleanSpark maintains exposure to potential cryptocurrency appreciation while accessing necessary capital. This approach has gained popularity among Bitcoin-holding corporations seeking growth funding without triggering tax events or dilution concerns.
CEO Matt Schultz emphasized the financing supports CleanSpark’s evolution across multiple business segments. The company identifies opportunities to maximize existing megawatt capacity and accelerate high-performance computing campus development.
CleanSpark plans to deploy the credit facility proceeds across several strategic areas. Bitcoin mining hashrate expansion remains a primary focus, building on the company’s achievement of 50 EH/s operational capacity reached in June.
The funding will also support data center infrastructure improvements and high-performance computing capabilities. CleanSpark operates facilities across the United States in regions with favorable electricity pricing structures.
Growing Bitcoin-Backed Lending Trend
CleanSpark joins other major Bitcoin miners utilizing cryptocurrency collateral for corporate financing. Riot Platforms, holding over 19,300 Bitcoin, previously secured a $100 million Coinbase Prime facility earlier this year.
The trend reflects changing treasury management strategies among Bitcoin miners. Rather than immediately selling mined Bitcoin to cover operational expenses, companies increasingly retain digital assets on balance sheets.
Bitcoin-backed lending offers miners capital access while preserving cryptocurrency exposure. For companies with substantial Bitcoin treasuries, collateralized borrowing can provide more favorable terms than traditional debt financing options.
Two Prime specializes in institutional Bitcoin yield solutions and corporate lending services. The platform serves institutional clients seeking to monetize Bitcoin holdings through various financial products.
The broader Bitcoin-backed lending market continues expanding as cryptocurrency values rise. Individual investors also utilize these services for major purchases like real estate without selling underlying Bitcoin positions.
CleanSpark’s stock price declined 2.5% to $14.15 following the announcement, reflecting broader market volatility affecting Bitcoin-related equities. The company’s shares often correlate with Bitcoin price movements and mining sector sentiment.
The credit facilities provide CleanSpark enhanced financial flexibility as Bitcoin mining competition intensifies and infrastructure demands increase across the rapidly evolving digital asset landscape.
