CleanSpark Inc. saw its shares tick higher on Monday, extending a bullish trend from the previous week, following the announcement of an expanded Bitcoin-backed credit facility with Coinbase Prime. The Las Vegas-based Bitcoin mining firm's stock, after closing regular trading at $13.74, surged by more than 8% in after-hours trading to $14.86, and was last reported up 6% after hours, trading near $14.60.

The company secured an additional $100 million in credit, leveraging its significant Bitcoin reserves as collateral. This strategic move allows CleanSpark to fund its growth initiatives without having to sell its Bitcoin holdings on the open market, thereby preserving its exposure to the asset's potential upside. This approach effectively transforms mined Bitcoin into a dynamic working asset. For shareholders, this means growth can be financed through non-dilutive means, avoiding the issuance of new stock.

CleanSpark has increasingly adopted this strategy of utilizing its Bitcoin holdings to raise capital, a practice gaining traction among publicly traded Bitcoin miners. By using Bitcoin as collateral, companies can unlock necessary cash while maintaining their long-term position in the cryptocurrency. Matt Schultz, CEO and Chairman of CleanSpark, emphasized this benefit, stating, "This expansion with Coinbase Prime allows us to fund growth without sacrificing shareholder equity or liquidating Bitcoin." He added, "We see tremendous opportunity to accelerate mining growth while also preparing select data centers for high-performance compute applications."

The proceeds from this credit facility are earmarked for several key initiatives. These include expanding CleanSpark's energy portfolio, scaling its Bitcoin mining operations, and developing high-performance computing capabilities. A notable aspect of this plan involves converting some of its facilities located near metro centers into diversified compute campuses, catering to the rapidly growing demand for AI and cloud services. This diversification strategy is becoming increasingly important as competition intensifies among U.S.-based miners, with CleanSpark prioritizing energy expansion and efficiency to maintain its competitive edge. The company has also shown a readiness to venture into other forms of computing beyond mining, signaling adaptability within an evolving industry.

Brett Tejpaul, who leads Coinbase Institutional, lauded CleanSpark's latest capital strategy as "a significant step forward for growing the crypto ecosystem through focused capital deployment." He underscored the crucial role of Coinbase Prime in providing the necessary custody and credit infrastructure for this arrangement. Over the last five trading days, CleanSpark's stock has surged by 33%, reflecting strong market confidence in its strategic direction.