PowerCompute Refinances $18M Debt at ~2% APR Using Bitcoin as Collateral
PowerCompute consolidated three debt facilities totaling $18M under a single Bitcoin-backed loan at ~2% APR, pledging 307 BTC as non-recourse collateral. The rate cut saves roughly $480K/year without any Bitcoin sale.
Bitcoin-backed institutional lending just produced its sharpest public rate yet: a Nasdaq-listed mining company retired three legacy debt facilities at a fraction of its prior borrowing cost.
Key takeaways
- PowerCompute (NASDAQ: PWCM) pledged 307 BTC as non-recourse collateral to consolidate $18 million in debt under a single facility with Arch Lending at approximately 2% APR.
- The deal replaces a $11M Galaxy Digital loan and two Liebel loans carrying 12% APR, cutting PWCM's annual interest expense by roughly $480K without selling any Bitcoin.
- The 30-day rolling rate structure and margin call risk are real vulnerabilities, but the 2% print signals that specialized lenders are now pricing BTC collateral competitively with traditional secured debt.
PowerCompute, the Tampa-based Bitcoin mining and treasury company formerly known as LM Funding America, announced August 5 that it entered a permanent Bitcoin-backed credit facility with Arch Lending (legal entity: ChainFi, Inc.) on August 3, consolidating $18 million in existing debt at an initial rate of approximately 2% APR. The company pledged 307 BTC from its treasury as collateral.
The facility replaced three prior instruments: an $11 million loan from Galaxy Digital, a $5 million Liebel loan on a 15 MW Oklahoma facility, and a $2 million Liebel loan on an 11 MW Mississippi facility. PWCM entered a bridge loan with Arch on July 27 before converting to the permanent facility six days later.
What the Rate Cut Actually Costs and Saves
The math the press release doesn't headline: the two Liebel loans alone carried 12% APR on ~$7 million, representing approximately $840K in annual interest. At ~2% on the full $18 million consolidated balance, total annual interest runs roughly $360K. That's approximately $480K in annual interest expense eliminated without a single sat sold.
The collateral picture: 307 BTC at approximately $63,000 per coin as of August 3 close implies collateral value in the range of $18 to $20 million against an $18 million loan (approximate, based on market prices at the time of deal close), a thin margin that the company's "proprietary hedging structure" is designed to manage. The facility is explicitly non-recourse, and each 30-day rollover resets the rate, the floor price, and the ceiling price based on market conditions. The exact liquidation thresholds are not publicly disclosed.
For context, Arch Lending's public retail rates start at 7.25% APR. The 2% figure is an institutional non-recourse rate with a custom hedge structure embedded. The hedge absorbs the volatility risk lenders would otherwise charge for as a spread premium, effectively separating collateral management from credit pricing.
What This Signals for Bitcoin Treasury Companies
This deal is a data point in a trend line, not a one-off event. Bitcoin-backed preferred equity is already trading in Sweden. MicroStrategy, Metaplanet, Nakamoto Holdings, and a growing class of Bitcoin treasury companies have spent the last two years demonstrating that BTC on the balance sheet changes your capital structure options entirely. PWCM's deal is smaller in scale, but the 2% rate is the most aggressive publicly disclosed institutional rate seen for BTC-collateralized debt at this level.
What that rate implies: lenders are building proprietary hedging infrastructure around Bitcoin collateral specifically to offer rates this low. Lenders are investing in operational capacity to make BTC-backed debt a replicable, scalable product. The financial plumbing is being built out, quietly.
The company retained full BTC exposure while cutting its cost of debt from 12% on prior loans down to approximately 2% on the consolidated facility.
The falsifiable piece: if the rate at the next 30-day rollover resets materially higher (above 8%, say), or if a BTC price drop forces a margin call or liquidation event, the 2% print was a structuring artifact rather than a durable market signal. One forced liquidation at institutional scale would set the perception of BTC-collateralized debt back significantly. The hedge structure is doing real work here. Its details are not public.
What to Watch
The rollover. PWCM's next 30-day reset will be the first real test of whether 2% reflects a floor or a teaser. Watch for any 8-K disclosures around the rollover date, and watch the BTC price level against the facility's undisclosed floor price. If the hedge holds and the rate stays sub-4% through multiple cycles, the institutional infrastructure argument gets considerably stronger.
Sources
Frequently Asked Questions
The facility requires PWCM to post additional collateral if BTC's price declines below undisclosed threshold levels. The company's proprietary hedging structure, which resets floor and ceiling prices at each 30-day rollover, is designed to reduce liquidation risk. Full liquidation triggers are not publicly disclosed.
Arch Lending's public-facing retail rates start at 7.25% APR. The 2% is an institutional non-recourse rate for a Nasdaq-listed entity with a proprietary hedge embedded in the loan structure. The hedge absorbs the volatility discount lenders would otherwise build into the spread, making the effective credit pricing far tighter than a standard collateralized loan.
No. PWCM is the rebranded LM Funding America (LMFA), a Tampa-based company that has operated Bitcoin mining facilities in Oklahoma and Mississippi. The name changed to PowerCompute effective July 22, 2026, reflecting a broader pivot toward HPC and AI infrastructure alongside its Bitcoin mining and treasury operations.
