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Bitcoin (BTC) mining firms are under financial pressure as operational costs and competition rise. To navigate these challenges, John Glover, Chief Investment Officer at Ledn, suggests that miners should avoid selling their mined Bitcoin and instead use it as collateral for fiat-denominated loans to cover costs.
This strategy allows miners to access liquidity without liquidating their BTC holdings, which can help preserve future gains as Bitcoin appreciates. By holding onto Bitcoin, miners avoid selling into a depreciating fiat currency and can take advantage of tax deferment opportunities.
Using BTC as collateral also offers flexibility. Miners can use the loans for operational costs or reinvest in infrastructure, ensuring they can continue mining without sacrificing their Bitcoin holdings. In a volatile market, leveraging Bitcoin can provide stability and help miners weather financial storms.
As Bitcoin continues to gain value, this strategy provides a way for miners to stay financially viable without selling off their most valuable asset.
