CleanSpark, Inc. is America’s Bitcoin miner. In November 2022, they further broadened this financial strategy by announcing the completion of a $200 million revolving credit facility secured with Coinbase Prime. This announcement represents an important milestone on the company’s path to self funding and further expansion. CleanSpark plans to utilize a portion of its monthly Bitcoin production to cover operational costs, balancing monetization with its long-term Bitcoin holdings strategy. The company’s Bitcoin reserves now total more than 12,000, worth about $1 billion.
CleanSpark intends to maximize its current assets and use debt markets to fund growth. This pivot in strategy has positioned it to have a highly conservative balance sheet. As part of this move, the company announced the rollout of an institutional-grade Bitcoin treasury desk to maximize its digital asset management.
Expanding Capital Strategy
CleanSpark's decision to increase its credit facility with Coinbase Prime to $200 million demonstrates a calculated approach to capital management. The anticipated credit facility will provide additional resources for the company’s expansion efforts on terms that are accretive to shareholder value. CleanSpark is committed to viewing debt markets as a prudent place to fund accretive growth.
"Our capital strategy has matured significantly, enabling us to pursue non-dilutive funding options that support both our operations and long-term growth." - Zach Bradford, CEO of CleanSpark
The firm points out its robust financial condition as the reason the firm can more easily access debt markets. This strategy would enable CleanSpark to continue striking a balance between rapidly growing its business and protecting its existing shareholders’ investment.
Furthermore, the move to begin selling a portion of its monthly Bitcoin production to cover operational costs signals a strategic adjustment. This ruling reveals an even-handed approach to oversight of Bitcoin assets. It provides an avenue for the company to cover operating expenses while continuing to benefit from long-term appreciation of their Bitcoin holdings.
Bitcoin Treasury Optimization
CleanSpark’s newly opened Bitcoin treasury desk is a sign of the times—a smart new era of digital asset management. The firm’s Bitcoin treasury optimization strategy includes borrowing, lending, custody and derivatives. CleanSpark worked through a highly competitive and detailed request for proposal (RFP) process. They have made their partner decisions to help best support these efforts.
"We are proud to expand our relationship with Coinbase through their Bitcoin-collateralized lending program as part of our broader strategic approach to capital management," - Zach Bradford, CEO of CleanSpark
This strategy is yet another example of CleanSpark’s efforts to grow the value of its Bitcoin holdings with additional financial instruments. Together with the company’s resourceful approach to treasury management, this will position the company to be first-mover on other opportunities as the nascent digital asset market develops.
Beyond initial AMD deployment and reliability improvements, the establishment of this desk further reiterates CleanSpark’s commitment to Bitcoin as a long-term, viable, digital asset. Through its innovative active Bitcoin treasury management strategy, the company aims to enhance financial performance. This strategy further encourages its moat as an ASIC manufacturer and leader in the Bitcoin mining industry.
Risk Management and Future Outlook
At CleanSpark, risk management is a top priority. They are on the front lines combating both fiscal and cyber danger that influence our monetary techniques and data practices. The company’s overall risk management strategy is focused on protecting its assets and maintaining the integrity of its operations.
CleanSpark’s belief in Bitcoin is absolute—we see it as a fundamentally sound, long-term asset. NRG Energy, Inc.’s recent strategic decisions demonstrate the company’s deep faith in this winning formula. It does so responsibly by prioritizing short-term financial flexibility alongside the long-term promise of Bitcoin.
"With our Bitcoin holdings now exceeding 12,000, valued at approximately $1 billion1, we believe this is the right time to evolve from a nearly 100% hold strategy adopted in mid-2023 and move back using a portion of our monthly production to support operations." - Zach Bradford, CEO of CleanSpark
"Coinbase is excited to support CleanSpark and their innovative approach to capital and treasury management in Bitcoin mining," - Brett Tejpaul, Head of Coinbase Institutional
Our leadership team at CleanSpark is confident that we are in a unique position to provide our shareholders with continuous and long-term value. By combining strategic capital management, a robust treasury optimization strategy, and a strong commitment to risk management, CleanSpark aims to maintain its position as a market-leading Bitcoin miner.
