Arch Lending and PowerCompute Loan: $18m at 2% - the details on how it works

[Jmob17]

Hi all,

We put together an analysis of the loan and why they could offer 2%; its effectively a collar where Arch keeps the upside and and Powercompute protects on downside risk.  It looks like they sold calls on their BTC position. 

The full details with charts on the payoff curves are here:

https://borrowonbitcoin.com/articles/powercompute-arch-bitcoin-collar-loan

A very interesting deal since we usually only see this in tradfi.

[Jmob17]

Hi Hi, is nobody else excited about this loan structure but me?!?   

I think its really cool that we are seeing these developments because it means btc holders can find more value as they think about portfolio construction, risk and reward. 

I get its not for the hold only crowd but it could bring more traditional guys into our ecosystem.  Up Only!