PowerCompute Risks Entire BTC Treasury on 30‑Day Collar Reset

PowerCompute, a Bitcoin mining and treasury firm, ended its existing 30‑day Bitcoin collar early on Aug. 25 and added the unwind cost to its loan balance, increasing its debt by $3.765 million.

Early Reset and New Loan Terms

The original collar, started on Aug. 3 with a $18.13 million balance and a 2 % annual interest rate, was terminated 22 days into the period at a reference price of $78,500, above the prior $66,370 ceiling. The company’s Aug. 28 filing shows a replacement 30‑day collar with Arch Lending for $21.89 million, secured by the same 307 BTC, but with the interest rate raised to 6.5 %.

Unwind Cost Capitalized

PowerCompute’s borrowing subsidiary, US Digital Mining and Hosting Co., elected to add the unwind cost to the loan principal rather than pay it in cash or USDC. The annex to the agreement treats this amount as a settlement in lieu of any separate excess‑appreciation payment for the terminated period.

New Collar Mechanics

The new collar sets a $71,112 floor, a $75,000 ceiling, and a $93,500 knock‑in barrier. Arch Lending will test the reference price once on Sept. 24 at 8:00 a.m. EST. If the price stays below $93,500, the ceiling does not apply; if it reaches $93,500 or higher, the ceiling limits appreciation for the entire period. The conditional excess‑appreciation amount at the barrier would be 307 × ($93,500 − $75,000) = $5,679,500, payable in BTC or USD/USDC.

Interest and Potential Settlement

The full interest charge for the Aug. 25‑Sept. 24 period is $118,582.38, calculated on a 30/360 basis. PowerCompute can settle any excess‑appreciation by using retained BTC or by adding it to the loan principal in a future reset.

Risk Context

The reset price test on Sept. 24 will determine whether the $75,000 ceiling applies to the entire 30‑day period. PowerCompute retains all BTC appreciation unless the barrier is triggered, but the loan’s higher interest rate and the capitalized unwind cost increase its financing risk.