Bitcoin Treasury Gambles Entire BTC Reserve on Single 30-Day Reset Price

PowerCompute, a Bitcoin treasury and mining company, has taken on significant debt after using its entire BTC reserve in a 30-day reset price gamble. The company added $3.765 million to its debt when it elected to add the unwind cost of a terminated collar to its balance rather than settling it separately.

The original loan was due to reset September 2, but PowerCompute ended it on August 25 at a reference price of $78,500. This was above the always-on ceiling of $66,370 and resulted in an unwind cost that the company chose to add to its balance rather than paying cash or USDC.

The new collar has a floor of $71,112, a ceiling of $75,000, and a knock-in barrier of $93,500. If the September 24 reference price reaches this barrier, the ceiling will apply to the whole period, limiting PowerCompute's ability to profit from any Bitcoin appreciation above $75,000.

The company has a complex financing arrangement with Arch Lending, which remains secured by 307 BTC. The annual interest rate on the new loan is 6.5%, up from 2% on the original loan.