KULR Technology Group has secured a $20 million credit facility from Coinbase Credit, Inc., a subsidiary of Coinbase Global, Inc. The deal was revealed through a press release on Tuesday, with KULR having access to a multi-draw loan which has been secured by a portion of its Bitcoin holdings.
According to the company, the loan will be used to support its Bitcoin accumulation strategy. KULR said the funds will help grow its digital asset reserves without selling company shares or taking on traditional debt. “This marks KULR’s first bitcoin-backed credit facility, giving us access to non-dilutive capital at a competitive financing rate,” said Michael Mo, CEO of KULR.
The company said this is a step in the direction to strengthen its growth and its shareholder value. The tech company already held Bitcoin on its Balance sheet, so this loan will let it buy more,
Coinbase Prime, the institutional platform of Coinbase, is handling custody and wallet services for KULR’s Bitcoin. Recently, CEO Brian Armstrong mentioned in a tweet that eight of the ten largest public companies that hold Bitcoin also use Coinbase Prime, and there have been even more after that.
With this loan, KULR joins part of a trend where public companies use crypto-backed loans instead of raising money through stocks or banks. These loans are secured by the borrower’s bitcoin, which means companies don’t have to sell their digital assets. KULR is currently ranked 34th among 135 public companies that hold Bitcoin, according to Bitcoin Treasuries data.
Shortly after the announcement, the company’s stock jumped as much as 23% on Tuesday trading morning, reaching $7.94, before dropping down to $6.73. Over the past year, KULR’s shares have more than doubled in value.
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