Public bitcoin miners fund new hardware and sites through two main channels: convertible notes and at-the-market share programs. A convertible note is debt the holder may exchange for shares at a set conversion price, while an at-the-market program sells new shares through a broker at prevailing market prices. The at-the-market format traces to the early 1980s, per histories of the offering structure.
Each channel moves a different lever. Convertible notes bring in cash today and promise shares tomorrow, while at-the-market programs sell equity in small pieces at prices set in live trading. Knowing how each works makes a miner's capital raises far easier to read. This connects to our earlier piece, What a Bitcoin Treasury Company Is and How Its Funding Machine Works.
How Does a Convertible Note Turn Into Shares?
The issuance prospectus states either a conversion ratio or a conversion price, per the standard definitions of convertible bond terms. The conversion ratio is the number of shares an investor receives when exchanging the bond for common stock. The conversion price is the price paid per share to acquire those shares. The two are views of one deal, and the prospectus fixes them before any money moves.
Until conversion, the note pays interest and sits on the balance sheet as debt. After conversion, the debt leaves the balance sheet and the share count grows by the agreed amount. Interest is the trade behind that exchange. Notes pay holders less than plain debt of the same issuer would, because the conversion option carries value of its own. That saving is the reward a company earns for accepting future dilution.
What Makes an At-the-Market Program Different?
An at-the-market offering is a follow-on sale of stock in which an exchange-listed company incrementally sells newly issued shares through a designated broker-dealer at prevailing market prices. The broker sells into the open market and passes the cash proceeds back to the issuer. Programs can start and stop at any point, and a company can hold back on days when prices look weak.
That control over timing is the main feature. Capital arrives on an as-needed basis, without a fixed offering date, and a higher share price means more money raised for each block of stock sold. Size limits still apply. A program states a maximum amount, and sales under it show up in periodic filings, so the pace of issuance stays public even though each sale is small.
What Does Dilution Mean for Existing Shareholders?
Dilution is the shrinkage of each existing share's claim on the company as the total share count grows. Every convertible note carries a promise of future shares, and every at-the-market sale adds shares straight away. Ownership percentages fall even though nothing about the business changes on the day itself. A note convertible into 20 shares, for example, adds exactly 20 shares to that count if holders convert.
Filings show the math in advance. A prospectus fixes the conversion terms, and periodic reports disclose shares outstanding, so the effect is visible before it lands. Notes convert only when the share price clears the stated terms, so realized dilution tends to arrive alongside the strongest stretches for the shares themselves. Dilution is not a fee or a penalty; it is the built-in price of the financing. For related coverage, see Miner Earnings Reports Breakdown: How Miner Earnings Reports Break Down Revenue and Power Costs.
Why Do Miners Switch Between the Two Channels?
The two channels answer different needs, and a filing usually shows which one a company reached for.
- Convertible notes: cash up front, interest along the way, shares only if holders convert.
- At-the-market programs: shares sold now at live prices, in amounts the issuer sets day by day.
- Prospectus terms: the stated conversion price or ratio caps how many shares each note can become.
A miner with a strong share price may prefer to sell equity directly, since each block of stock raises more cash. One protecting its share count may accept debt with a conversion option instead, trading a lower interest burden for possible dilution later. The mix a company chooses shows how it weighs cash today against shares tomorrow.
Conclusion: Two Taps Into One Share Pool
Convertible notes and at-the-market programs end in the same place: more cash on hand and more shares outstanding. The note defers the share issuance and prices its terms in advance, while the program sells shares as the market stands ready. Reading a miner's capital raise is mostly a matter of spotting which tap the company used, at what conversion terms, and how many new shares wait in the pipeline.
