PowerCompute Ditches Bitcoin-Backed Loan, Reduces Secured Debt
PowerCompute, a company specializing in Bitcoin mining and high-performance computing, has abandoned its Bitcoin-backed loan agreement. In its place, the company will use its assets as working capital.
The agreement with Arch Lending has been fully closed, with approximately 267.3 Bitcoins out of the 307 provided as collateral sold to repay the loan.
The funds raised were used to settle a $21.89 million loan principal, approximately $118,582 in interest, and $440,122 in transaction fees.
The sale was conducted by mutual agreement between the parties during the September 24th renewal period predetermined in the loan agreement, and was not the result of a margin call or forced liquidation.
As a result of this move, PowerCompute has reduced its secured debt from $19.4 million on June 30 to approximately $1.25 million.
The company plans to treat Bitcoin not as a leveraged treasury asset, but as working capital for equipment purchases, operations, and company growth.
This development highlights the risks of publicly traded companies' Bitcoin strategies, which can expose them to additional collateral requirements or selling pressure during price declines.