Bitcoin miners earn BTC, but most operating expenses are paid in fiat:
- electricity and hosting
- ASIC purchases and repairs
- data-centre construction
- payroll and working capital
This creates a recurring problem. A miner that needs EUR, CHF or USD must normally choose between:
- selling mined Bitcoin; or
- depositing it with a lender that can issue margin calls and automatically liquidate the collateral when BTC falls.
We are developing
BitVault Lending to explore a third option: fixed-term, Bitcoin-backed business financing using non-custodial, policy-controlled collateral, with no oracle and no automatic liquidation triggered by the BTC price.
How the proposed structure works- The mining company and lender agree in advance on the loan amount, currency, duration, interest rate, collateral and repayment conditions.
- The borrower commits Bitcoin to a policy-controlled on-chain output containing predefined spending paths and timelocks.
- The collateral is not deposited into the lender’s ordinary wallet or a pooled custodial account.
- Once the collateral transaction is verified, the lender transfers the agreed fiat amount to the borrower.
- There is no price oracle controlling the collateral. A fall in BTC’s price does not, by itself, cause a margin call or liquidation.
- After repayment, the borrower recovers the collateral through the agreed path.
- If the loan is not repaid, the lender’s predefined enforcement path can become available after maturity and the applicable delay.
To be precise, “no liquidation” does not mean that the debt can never be enforced. It means
no automatic price-based liquidation during the loan term. Enforcement remains possible following the contractual default and maturity conditions.
Why this may be particularly useful for minersMining profitability and BTC collateral values frequently fall at the same time. With a conventional Bitcoin-backed loan, a miner can face a margin call precisely when mining margins and available liquidity are under the greatest pressure.
That can force the company to sell or lose BTC near the bottom of a cycle. In the worst case, the miner loses the treasury needed to survive until the next cycle or halving.
BitVault Lending is being designed to give miners something conventional margin lending does not provide:
time.
The miner can obtain working capital without selling BTC and without allowing short-term market volatility to activate an automatic liquidation engine.
Indicative economicsWe are currently assessing an indicative borrower cost around
14% APR, subject to underwriting, jurisdiction and final contractual terms.
Fourteen percent is not cheap capital, and we do not pretend otherwise. The relevant comparison, however, is not only with a bank loan. It is also with:
- selling Bitcoin and losing future appreciation;
- being automatically liquidated during a temporary drawdown;
- interrupting mining operations because fiat liquidity is unavailable;
- failing to remain operational until the next market cycle or halving.
If retained BTC appreciates by more than the financing cost, the upside preserved by not selling may exceed the interest paid. There is obviously no guarantee that BTC will appreciate. The certain benefit is that
price volatility alone cannot automatically dispose of the collateral.
To make the absence of margin calls sustainable for lenders, the initial structure is expected to use conservative collateralisation, fixed maturities and individual business underwriting.
Who we want to hear fromWe are looking for feedback from:
- independent mining companies;
- small and medium-sized mining farms;
- hosting operators with proprietary mining fleets;
- miners accumulating BTC as a corporate treasury asset;
- mining infrastructure companies seeking EUR, CHF or USD liquidity.
If this type of financing could be relevant to your operation, you can register your interest here:
Join the BitVault Lending early-access listRegistration is not a loan application, offer of credit or commitment to lend. It allows us to understand demand, preferred currencies, indicative loan sizes and jurisdictions before selecting participants for the pilot.
We would also appreciate honest feedback from miners:
- Would no price-triggered liquidation justify a higher APR for you?
- What initial LTV would you consider reasonable?
- Would you prefer EUR, CHF, USD or stablecoin settlement?
- Would a six-month or twelve-month term be more useful?
- What concerns would you have about policy-controlled, non-custodial collateral?
You do not need to disclose financial information publicly. Feel free to reply with general feedback or register privately through the link.
Website:
https://www.bitvault.sv/lendingYour Bitcoin strategy should not be decided by the market’s next price tick.
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