Bitcoin mining company raises $5.2 billion via convertible bonds

Bitcoin mining companies collectively raised a staggering $5.2 billion in convertible notes in recent days.

Bitcoin mining company raises $5.2 billion via convertible bonds

Convertible Notes Remain Key Funding Tool for Bitcoin Miners
Bitcoin mining companies are turning to convertible notes to raise funds to acquire Bitcoin and improve mining facilities. According to a report by The Minermag , seven publicly traded Bitcoin mining and data center companies have raised a total of $5.2 billion through convertible notes since June 2024. Of this, 70%, or $3.6 billion, was raised between November and December 2024.

Notable fundraisings include MARA Holdings’ $850 million convertible note offering to purchase 1,423 bitcoins, Core Scientific’s $350 million convertible senior notes, Biddle’s $150 million convertible note offering, and Blockstream’s $210 million convertible note round.

Bitcoin mining company raises $5.2 billion via convertible notes

Convertible notes are a hybrid financing method that enables companies to borrow money by issuing debt that can be converted into equity under certain circumstances. As part of the debt framework, these notes provide investors with regular interest payments. Convertible notes also contain conditions that convert the debt into equity so that investors can profit from the appreciation of the company's stock.

The two largest publicly traded Bitcoin mining companies by market capitalization are MARA Holdings ($8 billion) and Core Scientific ($4.6 billion), both of which own a large number of Bitcoin miners.

However, MARA keeps all the Bitcoin it mines every month . It uses convertible notes to pay for operating expenses and buy more Bitcoin from the market. Core Scientific, on the other hand, has expanded into artificial intelligence (AI) hosting and high-performance computing. Its previous HODL strategy has been abandoned and it currently no longer holds any of the Bitcoin it mines.

The results of MARA’s aggressive Bitcoin acquisition strategy and Core Scientific’s diversification into AI hosting remain unclear, and the four-year cryptocurrency cycle plays a key role in the dynamics of the debt market.

Convertible notes show investor optimism about the profitability and resilience of bitcoin mining companies, especially as bitcoin prices continue to attract bullish forecasts. However, debt instruments contain risks, as evidenced by past industry struggles during bear market cycles.