"BTC Lending Exec Advises Mining Firms to Use Collateralized Loans Over Selling Bitcoin for Operational Costs"

# Bitcoin Mining Firms Urged to Leverage BTC-Fiat Gap for Financial Stability Bitcoin (BTC) mining companies dealing with profitability issues might find a solution by taking advantage of the growing differences between Bitcoin and fiat currencies. John Glover, Chief Investment Officer (CIO) of digital asset lending firm Ledn, emphasized this point during a Cointelegraph interview on October 3. Glover recommended that miners avoid selling newly mined Bitcoin. Instead, they should use BTC as collateral for fiat-based loans to cover operational expenses. Selling Bitcoin may result in the loss of a long-term appreciating asset, he argued. “By holding mined Bitcoin, miners can benefit from potential price appreciation, tax deferral advantages, and the chance to generate additional returns by utilizing BTC held in their corporate treasury,” said Glover. “If you’re engaged in mining, you’re effectively producing Bitcoin at scale and inherently understand its potential for long-term value growth. Selling such an asset contradicts your objective.” # Debt-Based Strategies Gaining Traction Among Miners This debt-driven strategy aligns with corporations like MicroStrategy, which have issued bonds or sold equities to acquire Bitcoin. The model takes advantage of discrepancies between Bitcoin fundamentals and fiat currencies used for corporate fundraising, potentially generating significant returns. For miners facing increased competition and other operational challenges, BTC-backed loans might serve as a crucial lifeline. These loans could provide a cushion for navigating an increasingly volatile market and economic uncertainties exacerbated by global policy shifts, such as trade protectionism. # Trade Tensions Amplify Challenges for Bitcoin Miners The Bitcoin mining sector operates under significant pressure, characterized by heightened competition and the rising need for powerful computational resources, which drive up capital expenditures. Compounding these hurdles, the protectionist trade policies under the Trump administration, particularly widespread import tariffs, have led to soaring costs for importing specialized mining equipment like ASICs. As a result, miners have liquidated more than 40% of their BTC reserves in response to ongoing macroeconomic uncertainties. According to TheMinerMag, March 2025 recorded an unprecedented monthly sell-off of Bitcoin equivalents, marking the culmination of a long-term HODLing strategy that persisted after April 2024’s halving event. This surge in sales, the most significant since October 2024, underscores the financial strain miners face in today’s challenging environment. For Bitcoin mining firms, the strategic use of BTC-backed loans offers not just operational resilience but also a way to maintain exposure to Bitcoin's long-term investment potential, mitigating the necessity to sell a valuable appreciating asset during market downturns.