They use assets to acquire more assets. They use the tax code the way it was written to be used. And they build systems where each dollar they deploy does more than one job at a time.

What we are about to walk through is exactly that kind of system. Mark Moss call is The Perpetual Bitcoin Machine. And it is one of the most compelling wealth strategies available to Bitcoin holders today.

Here is the core idea in one sentence: Borrow against the Bitcoin you already own, use those funds to purchase hosted Bitcoin miners, write off the full cost against your tax bill, and collect newly minted Bitcoin every single month — while your collateral keeps appreciating.

It’s a proven blueprint just with a new asset.

Let’s break down every step.

Before we get into the mechanics, let’s establish the starting point. This strategy is built for someone who:

1. Already holds a meaningful amount of Bitcoin (or another asset that can be leveraged: Real Estate, Equities, Whole Life Insurance, etc.)

2. Has a tax liability (W-2 income, business income, capital gains, or some combination)

3. Wants to acquire more Bitcoin without selling what they have

If that describes you, keep reading.

Step 1: Borrow Against Your Bitcoin

The first move is capital deployment — without triggering a taxable event.

Selling Bitcoin to fund an investment creates a capital gains tax event. Borrowing against it does not. A Bitcoin-backed loan allows you to access liquidity while your BTC continues to appreciate.

Here is how the loan structure works in this model:

• Loan-to-Value (LTV): 33% — For every $3 of Bitcoin you hold, you can borrow $1. This conservative LTV gives significant cushion against price volatility and keeps margin call risk low.

• Interest Rate: 9% annually, accruing monthly and rolling into the loan balance, no monthly cash payments required.

• Term: 1 year, refinanced annually. The loan rolls forward each year, with accrued interest folded into the new principal.

Using the Tier 2 package as our model:

• Loan amount: $150,000

• Collateral BTC required: ~5.55 BTC

• Collateral value at origination: ~$444,000

• Starting LTV: 33%

• Annual interest rate: 9%

• Annual power cost of ~$46,000 added to loan balance each year

The $150,000 in loan proceeds funds the entire mining operation: 20 Bitcoin Miners (Antminer S21 XP, 270T), setup, and the first full year of power costs.

Step 2: Buy the Miners — and Reclaim Your Taxes

Under current IRS code, Bitcoin mining equipment qualifies as 5-year MACRS property — and it is eligible for 100% bonus depreciation in Year 1. This means you can deduct the full purchase price of the hardware from your taxable income in the year you buy it.

But the deduction does not stop at the hardware.

Electricity costs for Bitcoin mining are a deductible business expense. And there is a powerful timing strategy built into the Blockware bundle: because the first full year of power is prepaid upfront as part of the package, that entire power cost can be deducted in the same tax year as the hardware purchase — even though the electricity will be consumed over the following 12 months. This strategy, sometimes called a “prepaid expense deduction,” is well-established in tax law and allows you to pull forward a full year of operating deductions into Year 1.

The result: the entire $150,000 Tier 2 bundle is deductible in Year 1.

Here is what that looks like across different tax brackets:

At a 37% marginal rate, the government effectively hands you back $50,963 of your $150,000 investment in Year 1 alone — before a single Bitcoin has been mined. Your effective out-of-pocket cost on the bundle drops to just under $99,000.

That is not a loophole. That is the tax code working exactly as Congress designed it — to incentivize capital investment in productive assets.

Consult your CPA or tax advisor to confirm eligibility and timing of deductions in your specific situation.

There is one more piece of the tax picture to understand before moving on: the Bitcoin your miners produce is taxable as ordinary income at the time it is received, based on the fair market value of BTC on the day of receipt.

This is a real consideration. For someone in the 37% bracket receiving 0.0736 BTC per month at today’s prices, the monthly tax liability is meaningful.

However, there is a natural and entirely legal solution built right into this strategy: use a portion of your mining proceeds to purchase additional miners. Those new miners generate a new round of bonus depreciation, which offsets the ordinary income from your current mining operation. The system feeds itself.

Step 3: Produce Bitcoin Around the Clock

Once the loan funds are deployed and the paperwork is signed, Blockware takes over completely. The miners are procured, deployed to institutional-grade facilities, and brought online, typically within 2 to 3 weeks of funding.

From that point forward, Bitcoin flows to your wallet automatically, every month, with no action required on your part.

Here is what the Tier 2 production profile looks like over 4 years, incorporating two key real-world factors: annual difficulty growth of 10% (as more hashrate joins the network, each miner’s share of rewards shrinks) and the April 2028 halving, which cuts block rewards in half beginning in Year 3.

A natural question: if the halving cuts production in half, doesn’t that hurt the strategy?

It does reduce the amount of Bitcoin mined. But historically, every halving has been followed by a significant appreciation in Bitcoin’s price — because the same demand now faces half the new supply. The miners you own continue operating. The Bitcoin you have accumulated is worth more. And critically, your collateral is worth more too, which improves your LTV and borrowing capacity going forward.

The Full Picture: 4-Year Portfolio Snapshot

Now let’s put the whole machine together. This is what the Tier 2 strategy looks like as a complete portfolio at the end of Year 4, under the model’s base assumptions (20% annual BTC price growth, 10% annual difficulty increase, 9% loan rate, April 2028 halving).

Your collateral appreciated by $476,000. Your miners produced 2.264 BTC worth $375,000 at Year 4 prices. You recovered over $50,000 in taxes in Year 1 alone. And you did all of it without selling a single bitcoin.

Why This Works: The Three Engines Running Simultaneously

Most investments have one engine. This strategy has three, running in parallel:

Engine 1: Bitcoin price appreciation. Your collateral BTC grows in value over time. At 20% CAGR, 5.55 BTC grows from a $444,000 pledged value to $920,000 in four years — an increase of $476,000 on an asset you never sold.

Engine 2: Tax recapture. In Year 1, the government effectively subsidizes your investment through bonus depreciation and the power prepayment deduction. At a 37% marginal rate, you recover more than $50,000 of a $150,000 investment before the miners even turn on. That subsidy is permanent — it does not have to be repaid.

Engine 3: Continuous BTC production. Your miners run 24 hours a day, 7 days a week, 365 days a year — producing Bitcoin that flows directly to your wallet, regardless of what price does in the short term. Over 4 years, you accumulate ~2.264 BTC from mining alone.

None of these engines cannibalizes the others. They compound together.

The Tradeoffs

No strategy worth understanding is without risk. Here are the ones you should know:

Loan risk. If BTC price falls significantly, your LTV rises. A sustained price decline could trigger a margin call, requiring you to post additional collateral or repay part of the loan. The 33% starting LTV provides substantial cushion — BTC would need to fall roughly 60%+ from origination to approach a typical margin call threshold — but it is not zero risk.

Difficulty growth. If more hashrate comes online faster than modeled, BTC production per miner falls faster than projected. We model 10% annual difficulty growth, which is conservative relative to historical norms but may understate growth in a strong bull market. That being said, the widespread pivot of large, public Bitcoin miners to Ai / HPC has triggered the first ever bear market in mining difficulty (down ~15% over the past six months).

Halving impact. The April 2028 halving is baked into these projections. Production drops roughly 50% beginning in Year 3. Historically, price appreciation has compensated — but there is no guarantee that pattern repeats on the same timeline.

BTC price assumption. The 20% CAGR assumption is adjustable in the model and is not a guarantee. All projected dollar values are a function of this assumption. Lower BTC appreciation reduces returns; higher appreciation amplifies them. 20% per year over the next 4 years would yield a BTC Price of ~$165,000; that seems reasonable to us.

All that being said, the biggest risk is inaction. You must have have a plan to beat inflation, minimize taxes, and build a wealth-compounding system.

This is it.

Who This Is Built For

The Perpetual Bitcoin Machine is most powerful for someone who:

• Holds BTC already and wants to put it to work without selling

• Has $100,000 – $500,000 in annual tax liability — business income, W-2 compensation, capital gains, or some combination

• Has a 3–4 year time horizon and is not looking for a short-term trade

How to Get Started

The best way to get started is to schedule a consultation with a member of the Blockware team. It’s free. It takes 30 minutes. And it could potentially save you tens or hundreds of thousands in taxes.

Fill out the form here and a member of our team will contact you in less than 24 hours to schedule a meeting: https://www.blockwaresolutions.com/info

Get Started

We’ve spent the past 3 months diligently waiting for a few key breakout signals while Bitcoin coils up like a spring.

These signals are now flashing. You should be ready for Bitcoin to make some big moves higher during the back half of this year.

The foremost indicator is the short-term holder realized price (cost basis). This level, when flipped from resistance to support, has historically signaled the end of down markets and consolidation.

In recent history, a breakout above STH-RP in Q4 2024 & Q2 2025 were followed by BTC moving significantly higher in the following months.

Acquiring Bitcoin isn’t about a one-time purchase. It’s about building a system that allows you to accumulate Bitcoin consistently in the most capital efficient way.

Right now, Blockware has some interesting bundled mining packages available:

Hardware. Hosting. Power. All included. All tax-deductible.

This allows our clients to keep more of the bitcoin they mine; rather than being forced to sell when Bitcoin is at a 40% discount.

- Buy miners without selling existing assets
- Lower 2026 taxes
- Increase your bitcoin position
- Rinse & repeat next year

If you want to learn more about these packages and how to get started, fill out the form on this page: https://www.blockwaresolutions.com/info

Miner Revenue per TeraHash is up ~40% from the February bottom. BTC picking up momentum + large-scale miners pivoting into HPC / Ai is creating the most bullish set up imaginable for smaller to mid-sized hosted Bitcoin miners (like those with Blockware).

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What a week in Las Vegas. After spending a few days on the ground with the brightest minds in the space, one thing is abundantly clear: the “noise” is quiet. Bear markets are a touch but necessary filter; they flush out the grifters and the unprofitable fluff, leaving behind a concentrated group of builders who are actually creating value. The conversations weren’t about “number go up” hype.

The companies still standing here in 2026 are the ones doing something meaningful, and the energy on the floor felt more like a construction site than a casino.

1. The Rise of Bitcoin Finance

Bitcoin finance is maturing into a robust ecosystem. Strike announced a reduction in their lending rates, signaling that liquidity is becoming more efficient. Between the growth of STRC and the expansion of digital credit markets, we are watching the plumbing of a new financial system being laid in real-time. We’re moving away from speculative “yield” and toward sustainable, Bitcoin-backed financial services.

This products will make it far easier to “live on Bitcoin.” Mitchell Askew, Head of Blockware Intelligence, touched on this topic during one of his live panels:

2. The Great Convergence: Mining & AI

The shift in the mining sector is accelerating faster than most realize. Bitcoin Mining & Ai Data centers are merging into a singular High-Performance Computing (HPC) industry. While the mega-miners are pivoting their massive footprints to host LLMs and AI workloads, it’s creating a massive opening for medium-scale miners. As the giants move toward HPC, Blockware clients and mid-sized operators are poised to gobble up the market share they leave behind. For more on how the mining landscape is shifting, check out this panel featuring Mitchell of Blockware and representatives from the top ASIC Manufacturers:

3. Beyond HODL: Building the Perpetual Machine

One of the most packed sessions was Mark Moss’s “Perpetual Bitcoin Machine” panel. It’s clear that the community is evolving past the simplicity of “HODL.” People are finally thinking about building a lasting system that can be passed on. Moss laid out a blueprint for living off your BTC forever in a tax-efficient way effectively building a system to pass down to your children.

This isn’t “new” tech; it’s the same playbook the Cantillon billionaire class has used for centuries, but now it’s being applied to the hardest asset on earth. You don’t sell the goose; you manage the eggs.

To learn more about tax-efficient Bitcoin strategies, sign up for a free consultation with the Blockware team: http://mining.blockwaresolutions.com/consult

4. Debunking the Quantum Boogeyman

Quantum is not a thread to Bitcoin in the short or medium term. Right now, it remains entirely abstract and hypothetical. Even if a quantum computer capable of breaking ECDSA eventually emerges, Bitcoin isn’t “ruined.” Quantum-resistant solutions are already in the works. Furthermore, the risk is misunderstood; a quantum computer attacks the public-private key pair, but if you’re using fresh bc1q (SegWit) addresses for every transaction, your public key isn’t even exposed to the network until you spend.

Even “Satoshi’s coins”, the ultimate FUD target, aren’t going to be snagged by a basement hacker who them proceeds to market sell all at once on coinbase. Quantum tech will emerge from Big Tech or nation-states, entities bound by legal due process, not a random actor looking to crash the market.

Mitchell discussed this on a BitGo sponsored panel with Adam Back, Alex of Project Eleven, and Richard Carback of Postquant labs. The recording has not yet been posted but we will post it when its live.

Key Takeaway: The signal has never been higher. While the tourists left during the drawdown, the architects stayed to build the infrastructure for the next decade.

One of the most interesting products being built is Blockware’s “Rent Hash.”

Bitcoin Miners produce Bitcoin at a discount below the market price. By renting a miner you can capture a piece of that spread without having to put up the capital to purchase the machine. Effectively, this allows you to dollar-cost average at a discount.

In the rental example below, you could acquire BTC for an effective price of $74,000 per coin. How? A $1,618 rental will earn ~0.02 BTC (~$1,740 worth) over the next two months.

Click here to see the full listing of rentals: https://marketplace.blockwaresolutions.com/renthash

See the full press release here: https://www.streetinsider.com/Pinion+Newswire/MicroBT+Announces+Strategic+Investment+into+Blockware%2C+Strengthening+a+Key+Industry+Alliance/26371989.html

The Blockware Team will be at Bitcoin 2026 in Las Vegas, April 27th - April 29th. Get ready for a week full of in-depth panel discussions, happy hours, and camaraderie.

Our team will be giving away a free Antminer S21 XP. Signing up for a chance to win is simple and free. All you have to do is visit the Blockware booth.

It’s large, green, and will be in the center of the conference hall. You won’t miss it.

Come talk Bitcoin Mining and enter for a chance to win a free miner worth ~$4,500.

If you’re unable to attend the conference and would still like to learn more about Bitcoin Mining with Blockware, click here to sign up for a free 30-minute consultation with a member of our team.

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While broader sentiment has remained mostly bearish since Bitcoin dropped to ~$60,000 in early February, Bitcoin Miners have quietly recovered to pre-February levels.

Over the past two months, Bitcoin Miner Revenue per Terahash (Hashprice) is up ~30%; currently sitting at ~$0.038/Th/Day.

Steady recovery in the price of Bitcoin coupled with a flurry of downward difficulty adjustments has created the perfect environment for Bitcoin miners.

The price of Bitcoin Mining Servers (ASICs) is beginning to reflect this recovery in hashprice.

The official listed price on Bitmain’s website for Antminer S21 XPs has increased to $17/Th — up from $15/Th back in February.

The actual price of mining hardware can vary; it’s a far less liquid and fungible market than Bitcoin itself (nothing’s more liquid than Bitcoin; billions of $ of trading volume 24/7/365). Deal size, used vs new, shipping times, etc., can all impact miner prices and no two deals are identical.

That being said, the listing price from the manufacturers tends to initiate a “ripple effect”, which leads to a change in pricing across the breadth of the market.

Miner prices on the Blockware Marketplace are showing a similar trend.

S21 XPs, as recently as March, were selling for ~$13.5/Th on the platform. The lowest available listing is $17.7/Th — nearly a 30% increase.

The Blockware Marketplace is a peer-to-peer platform that allows users to buy/sell hosted miners. Often times, these units carry a “premium” relative to purchasing brand new machines. Time is money; buying a machine that is already on the rack at one of Blockware’s data centers can be more valuable than waiting 2 to 3 weeks for brand new units to arrive.

The Marketplace is great if you’re new to Bitcoin Mining and want to get your feet wet with 1 or 2 machines.

Blockware has bulk discounts available (on hardware & power costs) for clients purchasing 10 or more machines. If you’re interested in learning more about Bitcoin Mining — bonus depreciation, power costs, BTC revenue, etc. — fill out the form here: https://mining.blockwaresolutions.com/info

A member of our team will provide more information and help you determine if Bitcoin Mining makes sense for you and your financial goals.

Learn More about Bitcoin Mining

Risk is on. QE is underway. A dovish Fed chair takes office next month. Weak hands have been shaken out.

The bullish catalysts are compounding. Bitcoin likely surprises to the upside over the next 12 to 24 months.

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The orange bars tell the sharper story within the story. AI-optimized server electricity usage alone is expected to grow nearly fivefold by 2030, from 93 TWh in 2025 to 432 TWh. That single subcategory will represent nearly half of all data center power demand by the end of the decade. The capital flowing into this infrastructure is pre-leased, contracted, and anchored by hyperscaler demand that has no viable alternative. For operators with access to power, land, and capital, the window is open, but not indefinitely.

Wholesale Colocation Asking Rates

The price of a megawatt has never been higher, and it is still rising. Average wholesale colocation asking rates in primary U.S. markets have gone from $120/kW-month in H2 2021 to $196/kW-month in H2 2025, a 63% increase in four years. Our base-case estimate puts the trajectory continuing toward $210/kW-month by H2 2026 as supply constraints in every major market remain structurally unresolved. Northern Virginia, home to the world’s most densely interconnected data center cluster in Ashburn, is already at $215/kW-month, the highest rate ever recorded in any U.S. market.

The important context for Bitcoin miners: converting to annual per-megawatt terms, a $200/kW-month rate implies $2.4M in annual revenue per MW of contracted capacity. A 100 MW facility at that rate generates $240M per year, before power pass-through revenue, against well under $100M in gross revenue from Bitcoin mining at current economics. That gap is the core economic logic behind every miner-to-HPC pivot you have seen over the past 18 months.

Publicly Disclosed Miner-to-AI Deals

This table represents the deal landscape as it actually exists today, not as it has been hyped. Core Scientific locked in 500 MW with CoreWeave at approximately $121/kW-month over 12 years, $8.7B in contracted revenue. Cipher Digital followed with 600 MW split between AWS and Fluidstack/Google at approximately $149/kW-month, totaling more than $19B. Hut 8 signed a 15-year, 245 MW lease with Fluidstack at roughly $160/kW-month for $7B. The pattern is clear: multi-hundred MW commitments, decade-plus durations, and hyperscaler-grade counterparties.

Two things stand out beyond the headline numbers. First, the companies that moved earliest locked in rates that are now meaningfully below current market. Core Scientific’s $121/kW-month is roughly $75–80/kW-month below where new deals are being priced today. First-mover advantage in this market is not a buzzword; it is tens of millions of dollars per year in contracted revenue that latecomers cannot capture retroactively. Second, the asterisk on IREN’s deal is worth understanding: their $810/kW-month implied rate reflects an AI cloud services agreement where they own the GPUs and sell compute time, not a pure infrastructure hosting deal. It is a fundamentally different risk-return profile than the landlord model.

Implied Hosting Rate by Deal

Reading this chart from top to bottom tells the whole competitive story. The current Ashburn market peak of $215/kW-month sits at the far right. Core Scientific’s CoreWeave deal, struck in 2024, sits at $121/kW-month. The gap between those two numbers, roughly $94/kW-month, represents the market appreciation that has occurred since the first major miner-to-AI deal was signed. On a 100 MW facility, that gap equates to approximately $113M per year in forgone revenue.

This is why JPMorgan, in upgrading Cipher and IREN in late 2025, focused so heavily on contracted revenue as a valuation anchor. The landlord model with a long-duration, power-pass-through lease to a creditworthy hyperscaler converts a volatile mining operation into something that trades more like infrastructure. The rate you lock in today determines the economics for the next decade. Every month of delay is a month of appreciation at the market rate that a new deal will never recapture.

How Data Center Electricity Demand Will Be Met (2024–2030)

The power required to run AI infrastructure has to come from somewhere, and the IEA’s breakdown of incremental supply sources is instructive. Renewables lead with approximately 110 TWh of additional generation, driven primarily by wind, solar, and corporate PPA strategies from hyperscalers. Natural gas follows closely at 130+ TWh, the fastest-to-deploy dispatchable source in most markets. Nuclear plays a smaller role through 2030 but is set to accelerate meaningfully as the first small modular reactors come online, supported by more than 20 GW of planned SMR financing from technology companies.

The takeaway for investors is not which energy source wins; it is that power delivery, not land or capital or even demand, has become the binding constraint. Data center vacancy in primary U.S. markets sits at 1.6%, an all-time low. Interconnection queues in constrained markets now extend beyond eight years. Operators who already hold permitted, connected power, precisely the position Bitcoin miners built for themselves over the prior decade, are structurally advantaged in a way that cannot be quickly replicated by new entrants regardless of how much capital they have.

Antminer Efficiency Progression

This table is one of the most important data sets in Bitcoin mining, and it rarely gets the attention it deserves. The efficiency gain from S1 to S3 was 60%. S3 to S7 was 66%. S9 to S17 was 54%. By the time you reach the S21 XP, the generation-over-generation improvement had compressed to 10%, the smallest air-cooled gain on record at the time. The S23 Air, shipping now after an eight-month delay from announcement, offers roughly 18% improvement over the S21 XP. That sounds reasonable in isolation. In context of the trend, it is further confirmation that ASIC hardware is commoditizing.

The implications of diminishing efficiency gains compound in ways that are not immediately obvious. When improvements were large, new machines rapidly made older hardware uneconomical, forcing rapid fleet turnover and driving accelerating hashrate growth. As gains compress, older machines stay competitive longer. The competitive lifespan of an S21 XP today is materially longer than the competitive lifespan of an S9 was when the S17 arrived. For low-cost miners running well-positioned fleets, this is quietly favorable. For the hashrate growth outlook, it means the hardware upgrade cycle is no longer a reliable driver of rapid network expansion.

ASIC Efficiency Over Time (Log Scale)

The log scale on this chart is deliberate; it is the only way to fairly visualize a curve that drops from 2,000 W/Th in 2013 to 11 W/Th today. On a linear scale, the recent improvement would look nearly flat, and on a log scale, you can see that it genuinely is flattening. The slope of efficiency improvement that characterized the S1-through-S9 era simply does not exist anymore.

What is driving this, beyond the physics of semiconductor miniaturization? TSMC, the world’s dominant advanced foundry, now allocates approximately 28% of its total wafer capacity to AI chip production. NVIDIA has secured a dominant share of TSMC’s most advanced packaging slots, with reports suggesting over 70% of CoWoS capacity reserved during peak allocation cycles. Bitcoin ASIC manufacturers, Bitmain, MicroBT, and Canaan, are competing for foundry capacity against NVIDIA, AMD, Broadcom, and hyperscaler custom silicon programs. The revenue-per-wafer from an AI GPU is multiples higher than from a Bitcoin ASIC. Foundries allocate to their highest-value customers. The result: ASIC lead times are extending, generation cadences are stretching, and efficiency gains are arriving later and smaller than at any prior point in Bitcoin’s history.

Bitcoin Network Hashrate Projection

This chart shows two futures diverging from Q1 2026 onward. The orange dashed line extrapolates the prior-cycle growth rate, absent any structural disruption. The green line incorporates what is actually happening: hundreds of MW of mining capacity being physically converted to AI/HPC use, and a slower ASIC deployment cadence driven by foundry deprioritization and compressed efficiency gains. The widening gap between those two lines is the cumulative drag from forces that are structural, not cyclical.

The counterintuitive implication is worth stating plainly: for low-cost Bitcoin miners who are not pivoting to AI, this is a tailwind. When hashrate growth slows or reverses, each remaining miner captures a larger share of the block reward without deploying additional capital. The difficulty adjustment mechanism ensures that a smaller network hashrate directly improves economics for those who remain. Small-to-mid sized miners, who typically lack the land scale, power interconnect size, and institutional balance sheet required to attract hyperscaler tenants, cannot access the AI pivot, but they do not need to. Every megawatt that leaves the Bitcoin network for an AI data center makes their existing operations more valuable.

Illustrative Cumulative Cash Flow: 100 MW Facility

This chart is the most important reality check in this report. AI data center ROI is real, but it is back-weighted in a way that demands clear-eyed capital planning. Model A, the pure HPC hosting landlord at roughly $167/kW-month with power costs passed through, generates approximately $150–170M in annual cash flow on a $1.7B facility. The math works. The payback period is approximately 10 years. Model B, the GPU cloud owner-operator who owns the servers and sells compute time, has a higher revenue ceiling but a dramatically steeper capex requirement approaching $3B, and faces a sharp cash flow dip at Year 5 when a full GPU server refresh is required before the original investment has paid back.

The most important sentence in this analysis: the highest returns in this environment will accrue to operators who locked in low-cost power positions years ago and are now converting that infrastructure to AI hosting at 2025–2026 market rates. A miner converting an already-depreciated 100 MW facility enters this equation with a cost basis that no greenfield builder can replicate today, at any price. That structural advantage, not the raw hosting rate, is the actual source of alpha in the miner-to-AI pivot. For everyone else evaluating this space as a new entrant, the payback timelines shown here should be the starting assumption, not the optimistic case.

Stack Bitcoin, Slash Taxes

There has never been a better time to deploy capital into Bitcoin mining, and the tax advantages available right now make the decision even more compelling. Under current U.S. tax law, Bitcoin mining hardware qualifies for 100% Bonus Depreciation, meaning the full cost of your machines can be deducted in year one. For high-income individuals, family offices, and businesses with meaningful tax liability, this is one of the most powerful accelerated depreciation opportunities available in any asset class today.

While large-scale miners convert megawatts to AI hosting and ASIC lead times extend, the miners who stay the course are quietly inheriting a less competitive network. Lower difficulty, longer machine lifespans, and a shrinking hashrate base all work in your favor. Blockware handles the infrastructure, the power contracts, and the operations. You own the machines and the Bitcoin they produce.

https://www.blockwaresolutions.com/info/

• Lower Federal Funds Rate

• BTC Increasing in Price (This makes STRC “safer” due to it increasing Strategy’s balance sheet and the overcollateralization; ultimately attracting more demand for STRC, driving the yield lower in order to maintain the $100/share peg).

Does it have a use-case? Yes. Is it as great as many in the Bitcoin world make it out to be. No.

Mitchell Askew, Head of Blockware Intelligence, breaks it down in detail here:

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Our base case is this: the bottom is likely on price, but not on time. Continued consolidation throughout Q2 is the most probable near-term outcome. The short-term holder cost basis is declining at approximately $1,000 per week and is on track to converge with the current price range around May or June, precisely when the Federal Reserve leadership transition takes effect.

The coil is tightening.

This is “accumulation territory.”

For a comprehensive analysis, download the free report here:

https://www.blockwaresolutions.com/blockware-q1-2026-market-update/

Download The Free Report

“This transaction enhances financial flexibility and increases strategic optionality as we expand beyond pure-play bitcoin mining into digital energy and AI/HPC infrastructure” - Fred Thiel (CEO)

The biggest story across Bitcoin, Finance, and Technology in 2026 is large-scale data center operators pivoting from Bitcoin Mining to Artificial Intelligence. This pivot is not due to a fault with Bitcoin or Bitcoin Mining. Rather, it’s a testament to how lucrative it is to be in Ai right now.

Firstly, the business models are essentially fungible.

Both require data centers with low-cost power.

If you own a data center, you must choose how to monetize that asset:

1. Self-Mining

2. Hosting (BTC Miners or Ai Servers)

The table below provides a side-by-side comparison between Bitcoin Mining (at current market prices) or Ai hosting (at $0.17/kWh).

At present, hosting Ai servers will earn ~1.64x more than running a fleet of Antminer S21 XPs. Furthermore, this likely understates the Ai side of the equation because recent large scale hosting deals have been at rates north of $0.20/kWh.

Not only is the revenue generally higher with Ai hosting, it’s far more predictable. Ai contracts are often signed for terms of 10 or more years; providing the data center operator with consistent positive cashflow, at a predictable clip, for over a decade.

For CFO’s of publicly traded data center operators, the higher gross revenue plus predictability makes Ai hosting a no-brainer.

Why This is a Good Thing

The “difficulty” to mine BTC is directly correlated to the amount of compute on the network. There’s a finite amount of BTC, fewer large scale miners competing for that means smaller miners (those without large-scale data centers) will earn more BTC.

For the first time in Bitcoin’s history, we’re seeing a sustained decrease in Hash Rate / Mining Difficulty. Over the past 90-days, hash rate is down ~6%. Previous drawdowns in hash rate were induced by:

• China Mining Man

• BTC Dropping to $16,000 in 2022

• 2024 Halving Putting Pressure in Inefficient Miners

None of these drops in hash rate were sustained long-term; this time is likely different. Demand for Ai servers is accelerating faster than new data centers can be built, which means hosting rates will likely increase, and more large miners will be incentivized to pivot.

As difficulty drops, Bitcoin Mining will become more lucrative to medium and smaller miners; those without access to the economies of scale that make Ai hosting an option.

Even though the price of BTC is down, Bitcoin miners are mining more BTC per unit of compute due to fewer large scale miners competing for the ~450 BTC that are mined daily.

Blockware’s Mining as a Service enables a ‘Cap Ex Lite’ model of Bitcoin Mining. Rather than building your own data center, you can mine BTC at one of ours:

• 100% Bonus Depreciation on the Miners

• 1 Cap Ex. = ASICs

• 1 Op. Ex. = Power Costs

• Production Cost of ~$50k per BTC

If you’ve ever considered mining Bitcoin, entering the market now will allow you to scoop up the BTC that large public operators are leaving on the table. Fill out the form here to learn more: https://www.blockwaresolutions.com/info

Mitchell Askew, Head of Blockware Intelligence, breaks down the ‘Ai Pivot’ in the latest video on the Blockware YouTube channel. Check it out 👇

The one-year price chart tells the story of Q1 in a single frame. After failing twice to reclaim the $75,000 level as support, Bitcoin broke down sharply in February, dropping to a low of approximately $60,000. That $60,000 level has since held, and March has produced a quieter, more constructive base. The $75,000 level now sits as the key resistance to watch on the way back up.

The failed recapture of the short-term holder cost basis was the technical trigger for the flush. Two attempts. Two rejections. The market needed to wash out the remaining weak hands before a real base could form, and it did exactly that.

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However, a series of higher highs and higher lows throughout March provide a glimmer of short-term hope. Medium to long-term, the data strongly signals that this is the time to be accumulating heavily.

Our base case currently is that the “bottom” is likely in from a price perspective, but perhaps not from a time perspective.

Speaking of accumulation, Bitcoin Miners accumulate BTC every day at a discount to the market price. A single S21 XP mining at $0.070/kWh uses ~$6 per day in electricity to produce ~$9 worth of BTC.

$9 worth of BTC for $6.

Nearly a 50% discount to the market price.

For long-term accumulators, this is a great asset in the portfolio.

Additionally, 100% Bonus Depreciation on the hardware makes this especially appealing from a tax-mitigation perspective.

Sign up for a free consultation to learn more: https://www.blockwaresolutions.com/info

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• BTC: +12%

• SPX: -2%

• TLT: -4%

• Gold: -7%

• Silver: -16%

While this is a relatively short-window, the recent outperformance is raising green flags for BTC bulls. BTC normally struggles during periods of large-scale macroeconomic and geopolitical uncertainty.

This recent price action hints at idiosyncratic factors, likely a supply shortage, that are proving to be more impactful on the market than marginal demand changes due to this event.

This relief rally for BTC has come at a time in which the market began pricing in a more hawkish position from the Federal Reserve. The market is now placing a 39% chance of no more rate cuts this year. A hawkish shift in policy expectations, normally a bearish catalyst for BTC, having no impact on the price is yet another piece of evidence towards idiosyncratic supply/demand dynamics in BTC.

In layman terms, there’s (likely) nobody left holding BTC that is willing to sell or change their position due to factors such as geopolitics or Fed policy; only the hardcore holders are still in the market.

The type to continue holding BTC after a 50% drawdown (plus 75 to 99% drawdowns in BTC related equities), is convicted in their long-term thesis.

Blockware’s “Buy the Dip Promo”, valid while BTC is under $75,000 per coin, is less than a 2% move away from expiring.

• 1 Free Month of Hosting

• $15/T on S21 XPs (online less than 24 hours after purchase)

• $0.070/kWh Electricity Rate

Acquiring miners today will allow you to accumulate BTC everyday at a discount even at it rallies higher over the next 12 to 24 months.

Additionally, miners qualify for 100% Bonus Depreciation under Section 168(k). This means you can deduct 100% of the miner cost in a single tax year.

For more information, set up a free consultation with a member of our team here: https://www.blockwaresolutions.com/promo

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Job Number 1: HODL & Appreciate

Job Number 2: Working Capital for a Bitcoin Mining Business

Most Bitcoiners struggle to choose between “Buying & Holding Bitcoin” and “Mining Bitcoin.”

But it doesn’t have to be a binary choice.

It’s not one or the other.

You can do both.

Product’s like Strike’s newly launched ‘BLOC’ enable this at scale.

Most HODLers let their BTC sit idle. This strategy uses a Bitcoin Line of Credit (BLOC) to access your capital without selling your BTC. Instead of selling BTC to buy hardware, we borrow against it to acquire a 20-miner fleet of Antminer S21 XPs. Additionally, this strategy using the same credit line to “float” the monthly power bills — allowing you to HODL 100% of the mining rewards, rather than selling off a portion of the rewards as you go in order to cover the power bill.

The Parameters

• Collateral: 10 BTC ($690,000 initial value).

• Hardware: 20 Antminer S21 XPs ($81,500 initial loan).

• OpEx: $3,796.64/month electricity ($0.07/kWh) added to the BLOC.

• Cost of Capital: 13% annualized interest, compounded daily.

• Market Assumptions: 30% BTC CAGR; 15% annual network difficulty growth.

The Rewards

Bitcoin Mining is the logical conclusion for a “dollar cost average” investor. You acquire BTC everyday, but at a discount to the market price. Additionally, the hardware used to mine the BTC qualifies for 100% Bonus Depreciation (more on that below).

The table below shows the 4-year output of this hypothetical mining operation. ~2.05 BTC mined over four years (including the 2028 halving).

Tax Savings

By writing-off the miner cost & power cost, this hypothetical miner would have ~$263,000 of qualified deductions over a 4-year period; with nearly half of that coming in the first year.

At a 21% tax rate, this would result in ~$55,000 of savings across 4 years. This could be used to buy more BTC, pay down the loan directly, or added as collateral to the loan.

Liabilities

Given that a BLOC does not require monthly payments and has no set re-payment debt, it’s a great choice for a leveraged Bitcoin-accumulation strategy like this — as it allows the BTC plenty of time to appreciate relative to the 13% interest rate. Based on the initial credit for the hardware plus monthly pulls of credit to cover the power costs, the total debt at the end of the term is ~$372,000.

The total incremental value built over the four-year period is ~$86,000; more than initial cost of the miners themselves.

Including the 10 BTC of initial collateral, the entire portfolio consists of 12.05 BTC at ~$197,000 per BTC (30% BTC CAGR) + the still profitable Antminer S21 XPs.

Assets: $2,459,998

Liabilities: $372,919

Net Portfolio Value: $2,087,079

For an-indepth analysis of this strategy, check out the latest video on the Blockware YouTube channel (linked below).

For a free consultation about setting up your own mining operation, sign up here: https://www.blockwaresolutions.com/info

Strike’s introduction of the Bitcoin Line of Credit (BLOC) is another step down the path of Bitcoin financialization. This product allows users to draw as little as $1 against their BTC collateral with no fixed maturity date, effectively transforming Bitcoin into a revolving credit facility. Unlike traditional fixed-term loans that require upfront commitment, this model allows Bitcoiners to remain “short dollars” while maintaining their full upside exposure.

Products like this solve a core dilemma for Bitcoin holders: How can I access this capital without actually selling the Bitcoin?

Bitcoin is “money”, and money is designed to be saved. But serious capital allocators have their money performing multiple jobs. Simply holding BTC means you’re delegating one of the best performing assets to just a single job. Accessing the liquidity to use BTC as working capital, while not selling the underlying asset and removing your exposure, creates an immense amount of optionality. You just need to be cautious on your LTV — don’t borrow so much to the point where a normal BTC pullback forces you to liquidate your collateral.

Oil Prices Dropping Back Down

After a violent spike toward $120 following the escalation of the US-Israel-Iran conflict and the subsequent chokepoint disruptions in the Strait of Hormuz, oil’s retreat to $95 provides a tentative breather for global markets. However, at nearly $40 above the pre-war baseline of $55–$60, this "settled" price still carries a heavy "war premium" that complicates the global inflation outlook.

This level remains high enough to strain the budgets of net energy importers, particularly across Asia, while also forcing central banks to reconsider the pace of projected 2026 rate cuts. Emergency measures like Strategic Petroleum Reserve (SPR) releases or naval escorts are likely being used to suppress prices in the short-term. However, if/when conflict subsides, prices will drop further and dovish policy will get priced back into risk assets.

Tech Indices Showing Signs of Life

Bitcoin, due to the market’s perception of it as a risk-on tech investment, has been caught in the crossfire of the widespread sell-off across tech. However, over the past two weeks, we’re seeing major tech indices begin to recover.

Over the past week, $IGV, $WCLD, and are all up by more than 5%.

Kevin Warsh Officially Nominated for Fed Chair Position

After months of speculation and rumors, we officially know who President Trump’s pick for the next Fed Chairman will be. If confirmed by the senate (likely but not without some turbulence), Warsh will take office mid-May, with his first FOMC meeting / rate decision being June 16th & 17th.

As we mention frequently, Bitcoin doesn’t trade well during uncertainty macro-environments. The installation of Warsh and his subsequent posturing & policy will be an important moment of clarity. Right now markets are not pricing in extreme dovishness. However, the President might have other expectations for the Fed Chair, especially with mid-term elections looming.

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While Hash Rate has rebounded following the winter-weather-induced curtailments, it still remains ~10% below its all-time high.

In today’s newsletter, we’ll discuss why this is happening, what the future likely holds, and an important practical application for Bitcoiners.

The primary reason Hash Rate has not made a new all-time high in nearly four months is because neither has the Bitcoin price.

The “cost of production” can vary wildly for every different Bitcoin miner. ASIC model, power cost, interest payments, etc. — there’s a number of factors that can determine what the Bitcoin price has to be in order for a miner to mine profitably. For Blockware Clients mining at $0.07/kWh using the most efficient miners available, that’s ~$52,000.

However, for miners with less optimized operations, the number is much higher. As BTC dropped from $125,000 to $60,000, miners with high breakeven prices turned off their machines. This allows Blockware clients and other high-efficiency miners to earn more BTC at the expense of the less-efficient miners.

~450 Bitcoin are mined every day. No more, no less. Fewer miners competing for these 450 BTC means every miner gets a little bit more. The chart below shows the daily BTC earnings for a miner running ten S21 XP 270’s.

10 Units currently mine ~0.0012 BTC every day.

Year-to-date, Hash Rate is down ~2.9%. While it’s highly unlikely that 2026 will end with a net-decrease in Hash Rate, it’s likely that it will be the least amount of growth in hash rate in a single calendar year.

The growth rate of Hash Rate is declining for 2 key reasons:

1. Improvements in mining technology are slim.

2. Large data center operators are electing to run HPC/Ai servers instead due to more predictable streams of revenue.

   

At Blockware we often refer to mining as a “Discounted Dollar Cost Average Strategy.”

Instead of buying BTC for market price, you produce a little bit of BTC at a discount (~$52k per BTC right now) every single day. The money you otherwise would have spent on a recurring DCA, you instead use to operate your machines — resulting in more BTC per $ spend.

With fewer miners competing for the finite amount of BTC, this strategy is even more powerful.

If you have a bullish stance on BTC long-term, the appreciation of your mining rewards will more than cover the cost of the mining hardware.

Our ‘Buy The Dip Promo’ is still live — but ONLY while BTC trades below $75,000.

• Antminer S21 XPs for $4,050 per Unit ($15/Th)

• Hosting at $0.070/kWh

• 1 Free Month of Power for Every Miner Purchased

For more details, fill out the form on this page and a member of our team will be in touch: https://www.blockwaresolutions.com/promo

When investors are uncertain and want to get into dollars fast, they sell what they can; which often times is BTC. Alternatively, if investors want to get long fast, but traditional markets are closed, they buy what they can; which often times is BTC.

Over the weekend, as conflict arose between the U.S. and Iran, BTC, as expected, sold off immediately. However, the sell-off was incredibly weak ($65k to $63k) and followed with a swift rebound. The takeaway? The people still holding BTC, after a 50% drop from the high, are convicted long-term holders. We discussed in-detail in Friday’s premium only newsletter, but supply is beginning to constrict. While it may take a little while before this results in higher prices, its a sign of market recovery.

A steelman would point towards the fact the the S&P is green on the day — and the broader market is not concerned with this conflict. However, despite green intraday performance, the S&P opened the day ~50 points below its Friday close.

Moreover, a strong performance from the $DXY over the past day, signals that the conflict is igniting a relative degree of fear/uncertainty in the markets. When investors are nervous, they go to dollars.

The ISM Manufacturing PMI — a cornerstone metric for gauging industrial health — printed a reading of 52.4 for February. Because any value above 50 indicates an expansion in the manufacturing sector, this figure confirms that industrial activity is growing rather than contracting.

This is the second consecutive month with a PMI > 50; after months of sub-50 values. In 2017 & 2021, BTC rallied alongside economic expansion (indicated by high PMI values, among other data points). Now that Bitcoin is more widely available and traded by a more traditional cohort of investors, its reasonable to expect that is general correlation to macroeconomic business cycles will increase.

For reference, in 2023 & 2024, BTC rallied in-spite of poor PMI data. This is due to idiosyncratic catalysts, namely the launch of Bitcoin ETFs, which allowed BTC to catch a bid.