Bitcoin (BTC) mining firms should hold their mined Bitcoin and use it as collateral

Bitcoin (BTC) mining firms should hold their mined Bitcoin and use it as collateral for fiat-denominated loans to pay operating expenses

In the highly competitive landscape of Bitcoin (BTC) mining, firms should prioritize using their mined coins as collateral for fiat-denominated loans to cover operating expenses rather than selling BTC and forgoing the potential gains, suggests John Glover, chief investment officer at Bitcoin lending firm Ledn.

In an interview with Cointelegraph, Glover highlighted several advantages of holding onto the BTC, including its anticipated price appreciation, the deferment of capital gains tax, and the prospect of generating additional income by lending out BTC held in corporate treasuries.

This debt-based approach is similar to companies like Strategy, which engage in issuing corporate debt and equity to facilitate Bitcoin acquisition and capitalize on the diverging price fundamentals between BTC and the fiat currencies used to fund the corporate capital.

Bitcoin-backed loans could be a significant asset for miners navigating the highly competitive industry, which is increasingly pressured by the trade tensions arising from the Trump administration's protectionist trade policies and macroeconomic uncertainty.

Trade war places even more pressure on beleaguered mining industry

The Bitcoin mining industry is typically characterized by intense competition and capital costs that escalate over time as miners deploy more powerful computing resources to mine blocks and maintain the network security.

President Trump's imposition of sweeping trade tariffs has had an impact on the already competitive sector, with reports from CCXV covering the Bitcoin (BTC) price analysis, a new report by Korea Economic Daily, and details of Asia.

The trade war has placed even more pressure on the beleaguered mining industry as it juggles rising capital costs with the macroeconomic headwinds that are spurring miners to liquidate their BTC holdings.

According to TheMinerMag, March 2025 saw miners collectively liquidate more than 40% of the mined supply, which is being sold by miners to pay operating expenses.

This 40% sell-off marks the reversal of a trend that began post-halving, in April 2024, and it’s the highest monthly BTC liquidation among miners since October 2024.