PowerCompute terminated a Bitcoin collar early on August 25, absorbing a $3.765 million unwind cost into the loan principal and entering a new 30-day financing arrangement with Arch Lending.
The prior collar, which began August 3 and was scheduled to reset September 2, was terminated 22 days into its period when Bitcoin traded at $78,500. That price exceeded the prior collar’s ceiling of $66,370. PowerCompute, through its borrowing subsidiary US Digital Mining and Hosting Co., elected to add the unwind cost directly to principal rather than settle it separately, according to the transaction annex.
The replacement collar secures 307 BTC at a new loan balance of $21.89 million, up from the prior balance of $18.13 million. The annual interest rate increased to 6.5% from 2%. The full 30-day interest bill under standard 30/360 day-count calculation totals $118,582.38.
Collar Structure and Reset Terms
The new collar sets a floor at $71,112 and a ceiling at $75,000 per Bitcoin. A knock-in barrier sits at $93,500, which is 20.2% above Bitcoin’s price of $77,808.23 as of August 29 at 2:23 a.m. UTC. The collar will test only at the scheduled reset on September 24 at 8:00 a.m. EST; the barrier does not trigger intraday liquidations.
Below the $93,500 barrier, PowerCompute retains all Bitcoin appreciation above the ceiling. If Bitcoin reaches or exceeds $93,500 at reset, the ceiling applies retroactively to the entire 30-day period. Excess appreciation above $75,000 becomes a conditional settlement amount of $5.68 million, which PowerCompute can satisfy through retained BTC, USD, USDC, or by adding to principal if rolling the loan again.
The transaction annex bars ordinary margin calls and liquidations during the rolling period, limiting forced settlement to the scheduled reset tests.
Prior Collar Terms and Early Exit
The terminated collar had a ceiling of $66,370 and ran from August 3 under a 2% annual rate. The early exit at $78,500 reference price meant Bitcoin had appreciated above the prior collar’s protection level. PowerCompute’s decision to capitalize the unwind cost rather than pay it separately reflects a refinancing approach common in collateralized Bitcoin lending, where rolling structures allow borrowers to extend exposure while managing cumulative financing costs.
