CleanSpark Borrows $1.15B at 0% — A Lifeline in the Bitcoin Mining Shakeout

The headline deal — what happened and where the cash goes

CleanSpark just pulled off a financial stunt: $1.15 billion in zero-coupon convertible notes due 2032, with an initial conversion price of about $19.16 (roughly a 27.5% premium to the stock price at the time). Think of it as borrowing huge sums now and promising equity later instead of paying interest today — fancy IOUs that turn into shares if things go well.

About $460 million of that windfall will be used to buy back shares from the very investors handing over the cash. The rest — roughly $670 million — is earmarked for power sites, land, data-center buildouts (yes, including AI and high-performance computing), paying down Bitcoin-backed loans, and general corporate use. In short: keep mining, build infrastructure, and try not to get crushed by the next difficulty spike.

There’s an implied vote of confidence here: lenders were comfortable accepting equity upside instead of cash interest. That’s a big advantage compared to smaller miners who often lean on pricey debt or dilutive stock raises. But it’s also a leveraged bet — if Bitcoin dips or CleanSpark stumbles, those converts become a dilution time bomb.

What this says about miner economics in 2025

Welcome to the one-zettahash club: global hashrate has exploded, and that turns mining into an arms race. CleanSpark finished the fiscal quarter with about 42.4 exahashes and said it wants north of 50 exahashes by next year — roughly 4.9% of the global footprint at current levels. If the company plowed the whole $670 million into rigs (which it won’t, because of AI and power plans), that capital could theoretically buy on the order of 70–110 exahashes at today’s quoted price per exahash.

Mining isn’t just about buying boxes anymore. Energy contracts, land, and data-center infrastructure are the new frontiers. Miners who can lock in cheap, stable power and access low-cost capital get to play in the top tier. Those who can’t are getting acquired, shut down, or forced into painfully dilutive moves.

CleanSpark’s public numbers show the strain: quarterly revenue climbed to about $181.7 million (up ~62.5% year-over-year), but they still posted a net loss and negative adjusted EBITDA. Their all-in mining cost was roughly $42,700 per Bitcoin, and at a Bitcoin price near $103,000 that implies decent gross margins before overhead — but energy alone ate up nearly half the revenue in the quarter. After halving and with hashrate surging, every operator feels the squeeze.

Two ways this could play out: bull, bear, and the AI wild card

There are two neat (but noisy) scenarios. In the bullish version, Bitcoin hangs around or above $100k, the hashprice stabilizes, and CleanSpark’s added capacity plus zero-percent-style capital produce strong free cash flow. The converts stay optional, lenders get equity upside, and shareholders (eventually) breathe easy.

In the bearish version, Bitcoin slides or hashprice weakens as more machines come online. New capacity earns less, balance-sheet leverage bites, and the conversion overhang dilutes long-term holders. Execution missteps or missed contracts for AI/HPC hosting would make life even harder.

The AI and high-performance computing push is worth watching. Hosting compute workloads can create steadier, contract-backed revenue, but it competes directly with deploying megawatts for mining. Hosting is fluffier on volatility but usually less leveraged to crypto price upside. Every dollar spent on AI capacity is a dollar not spent on hashpower — a strategic choice with very different return flavors.

Bottom line: this deal signals that the mining business is getting institutionalized. Cheap capital and low power costs are the moat. If you can’t access that combination, you’re at serious risk of consolidation. For CleanSpark, the bet is simple: grow scale, diversify infrastructure, and hope the math — and Bitcoin — cooperate.