What happens if you use a BLOC to buy Bitcoin Miners
How to double your BTC production without selling a single satoshi
The Strategy: Have Your Bitcoin Do 2 Jobs at Once
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