According to Cointelegraph, Bitcoin mining companies are being advised to retain their mined Bitcoin and use it as collateral for fiat-denominated loans to cover operational costs. This strategy, suggested by John Glover, chief investment officer at Bitcoin lending firm Ledn, aims to prevent miners from selling their Bitcoin and missing out on potential price surges. Glover highlighted several benefits of holding Bitcoin, including price appreciation, tax deferment, and the opportunity to generate additional revenue by lending out Bitcoin held in corporate treasuries. He emphasized that miners, who understand Bitcoin's potential for future appreciation, should avoid selling their assets.
This debt-based strategy mirrors the approach of companies like Strategy, which issue corporate debt and equity to finance Bitcoin acquisition, capitalizing on the differing fundamentals between Bitcoin and fiat currencies. The Bitcoin mining industry is currently facing challenges, with the mining hashprice—a measure of miner profitability—declining as more computing resources are deployed to secure the network. Bitcoin-backed loans could provide a crucial lifeline for miners struggling in this competitive sector, which is under increased pressure due to trade tensions and macroeconomic uncertainties.
U.S. President Donald Trump's protectionist trade policies have exacerbated the situation, with sweeping tariffs raising concerns about the cost of mining equipment, such as application-specific integrated circuits (ASICs). These tariffs threaten to make mining equipment costs unsustainable, adding to the industry's challenges. In March 2025, mining firms collectively sold over 40% of their mined Bitcoin supply amid heightened macroeconomic uncertainty and fears of price increases due to ongoing trade tensions. This sell-off marked a reversal of a trend that began after the Bitcoin halving in April 2024 and represented the highest monthly Bitcoin liquidation among miners since October 2024.
