Bitcoin miners should consider embracing a new financial strategy to bolster their operations amidst mounting economic pressures, according to John Glover, Chief Investment Officer at Bitcoin lending firm Ledn. Speaking to Cointelegraph, Glover advocated for miners to hold onto their mined Bitcoin and leverage it as collateral for fiat-denominated loans rather than selling it outright. This approach, he argues, could provide financial stability while allowing miners to retain assets with potential for price appreciation.
The Case for Holding and Lending
In a world where Bitcoin’s trajectory continues to be upward, miners stand to gain significantly by retaining their digital assets. “If you are mining, you are generating all this Bitcoin. You understand the thesis behind Bitcoin and why it is likely going to continue to appreciate in the future. You do not want to sell any of your Bitcoin,” Glover explained, emphasizing the strategic advantage of holding onto Bitcoin. By securing loans against their BTC reserves, miners can meet operational expenses without sacrificing potential future gains. This strategy also offers tax benefits and the opportunity to earn additional income through lending programs. As explored in our recent coverage of Metaplanet’s strategy to grow its Bitcoin reserve, similar approaches are being adopted by other industry players.
The model Glover proposes mirrors that of companies like Strategy, which issue corporate debt and equity to finance Bitcoin acquisition. By doing so, they profit from the differing fundamentals between BTC and the fiat currencies in which their capital raises are denominated. It’s a strategy that requires a deep understanding of market dynamics—and a stomach for risk.
Navigating Market Challenges
The Bitcoin mining sector isn’t without its hurdles. The hash price—a critical measure of miner profitability—has plummeted as more computational power is thrown into the ring. This, coupled with the Trump administration’s protectionist trade policies, has made the climate even more challenging. The specter of increased tariffs on crucial mining equipment like ASICs looms large, threatening to drive costs to unsustainable heights.
In March 2025, an unsettling trend emerged: mining firms collectively sold over 40% of their mined supply. This sell-off, driven by macroeconomic uncertainty and the potential for rising equipment costs, marked the highest monthly BTC liquidation since October 2024. The move reversed the post-halving trend seen since April 2024, when many miners chose to hold rather than sell.
A Lifeline in Bitcoin-Backed Loans
Bitcoin-backed loans could be the saving grace for many in the beleaguered mining industry. By leveraging their Bitcoin holdings as collateral, miners can access the liquidity needed to navigate these turbulent times. “These loans are a valuable lifeline,” according to industry insiders, allowing miners to sidestep the pitfalls of selling their BTC at potentially lower prices. This follows a pattern of institutional adoption, which we detailed in our analysis of alpha-generating digital asset strategies.
However, this strategy isn’t without its critics. Some analysts caution that the volatility of Bitcoin might pose a risk to miners depending heavily on these loans. What if Bitcoin’s value dips? The collateral might not cover the loan, leaving miners in a precarious position. Yet, for many, the potential rewards outweigh these risks.
Looking Ahead
As the mining industry grapples with these challenges, questions remain about the sustainability of the current model. Will miners continue to lean into debt as a means to keep their operations afloat? Or will market conditions force another shift in strategy?
The road ahead is uncertain, but one thing is clear: the decisions made today will have long-lasting implications. As we progress further into 2025, the landscape will likely be shaped by those who can balance risk with opportunity, leveraging innovative financial strategies to weather the storm.
In the ever-evolving dance of Bitcoin mining, adaptability could very well be the key to survival.
Source
This article is based on: Bitcoin miners should pay costs in depreciating currency — Ledn exec
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Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
