On Monday, shares of CleanSpark Inc. experienced an upward movement, continuing the positive trend observed the previous week. This increase followed the company’s announcement regarding an expanded Bitcoin-backed credit facility with Coinbase Prime.

The Las Vegas-based mining company concluded regular trading at $13.74 but surged more than 8% in after-hours trading, reaching $14.86 upon the news of this arrangement. Currently, the stock is exhibiting a 6% increase in after-hours, trading near $14.60.

CleanSpark has accessed an additional $100 million in credit, with the facility secured by its Bitcoin reserves. Instead of liquidating its Bitcoin in the marketplace, the company is utilizing its holdings as collateral, strategically converting mined Bitcoin into a functional asset.

For shareholders, this move signifies an opportunity to fund growth without the issuance of new stock, thereby maintaining a non-dilutive approach to scaling operations.

CleanSpark’s Utilization of Bitcoin as Company Collateral

CleanSpark has increasingly relied on its Bitcoin reserves to raise capital, a strategy that is gaining popularity among publicly traded miners.

By leveraging Bitcoin as collateral, these companies can retain exposure to the asset’s potential appreciation while simultaneously unlocking cash for operational use.

CEO and Chairman Matt Schultz stated, “This expansion with Coinbase Prime allows us to fund growth without sacrificing shareholder equity or liquidating Bitcoin. We see tremendous opportunity to accelerate mining growth while also preparing select data centers for high-performance compute applications.”

The company intends to utilize the proceeds to bolster its energy portfolio, scale Bitcoin mining operations, and develop high-performance computing capabilities. This includes transforming certain facilities located near metropolitan areas into diversified compute campuses, particularly as demand for AI and cloud services continues to rise. This strategic approach is becoming increasingly relevant amidst intensifying competition among U.S.-based miners. CleanSpark has particularly focused on energy expansion and efficiency measures to maintain a competitive edge.

Additionally, CleanSpark has indicated a willingness to diversify into other computing avenues beyond mining, demonstrating a flexible approach as the industry continues to evolve.

Brett Tejpaul, head of Coinbase Institutional, characterized CleanSpark’s recent capital strategy as “a significant step forward for growing the crypto ecosystem through focused capital deployment.” He emphasized the critical role played by Coinbase Prime in providing the custodial and credit infrastructure necessary for this deal.

According to market data, CleanSpark’s stock has appreciated by 33% over the last five trading days.

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