PowerCompute has refinanced $18 million in existing debt with a new Bitcoin-backed collar loan from Arch Lending, a structure that lets the company hold onto its 307 BTC rather than sell into the market. The loan, executed at $18,127,131.88, replaces an $11 million Galaxy Digital facility and two Liebel loans totaling $7 million.
How the collar works
The loan is structured as a collar with a floor of $58,860 and a ceiling of $66,370 per Bitcoin. It carries an initial annual interest rate of 2%. The first 30-day period runs until Sept. 2, when the loan's reset mechanism kicks in. Until that date, there are no margin calls or liquidations — even if Bitcoin's price blows past either strike price. That's a deliberate design choice, giving PowerCompute breathing room to avoid an immediate sale.
What happens at reset
On Sept. 2, PowerCompute's options depend on where Bitcoin sits. If the price is below the floor, the company can either let Arch keep the BTC or repay the loan. If it's between the floor and ceiling, PowerCompute can repay and recover the collateral, or roll the loan into a new period. If the price is above the ceiling, Arch receives the excess appreciation. The monthly reset includes a 24-hour cure period to address any shortfall, and if PowerCompute doesn't respond at all, the loan automatically matures rather than defaults — a softer outcome than a forced liquidation.
Why this refinancing
The new loan replaces $11 million owed to Galaxy Digital and two separate Liebel loans of $5 million and $2 million. That's $18 million in total, slightly less than the executed loan balance. The loan-to-value ratio sits at roughly 92%, depending on which disclosure you read. That's high, but the collar structure means the lender's downside is capped by the floor, and the borrower's upside is capped by the ceiling. PowerCompute effectively traded some potential upside for the certainty of not being forced to sell.
Protections and mechanics
Arch Lending can't just dump the Bitcoin if things go sideways. It must give at least one business day's notice before selling. And because the loan auto-matures rather than defaults when PowerCompute stays silent, the company avoids the usual cascade of penalties and forced liquidations. The reset schedule is monthly, so the next decision point is only weeks away. PowerCompute will have to weigh repaying, rolling, or walking away — and the clock is ticking.
