How does Loan My Coins work?

• Stake your bitcoin to borrow bitcoin at 95% LTV, with a 5% fee paid upfront. Sell the borrowed bitcoin (current cost basis) to fund strategies like investing in assets that may outperform bitcoin. Repay the principal after 12 months, or roll for up to 5 years, to reclaim your stack.

• Example: Stake 10 bitcoin, borrow 9.5 bitcoin ($950,000 at $100,000/bitcoin; 5% fee upfront). Sell for $950,000, invest, and repay 10 bitcoin to retrieve your 10 bitcoin.

Why not sell my Bitcoin outright?

• Selling low-cost-basis Bitcoin (e.g., bought at $1,000/bitcoin) triggers capital gains taxes. Loan My Coins defers taxes by letting you sell borrowed bitcoin (no gain, no tax), keeping your original stack untaxed.

• Example: Selling 10 bitcoin bought at $1,000 for $100,000/bitcoin could mean taxes on $990,000 in gains. With Loan My Coins, sell 9.5 borrowed bitcoin for $950,000 (no tax) and invest.

How is it safer than Bitcoin-to-fiat loans?

• Bitcoin-to-fiat loans risk lender failure (holding your bitcoin), margin calls (extra collateral demands), and liquidations (forced sales). Loan My Coins offers:

• Minimal counterparty risk: You hold borrowed bitcoin upfront, reducing exposure if the counterparty fails.

• No margin calls or liquidations: Your bitcoin is safe, even in volatile markets.

• Low 5% upfront fee: More affordable than 10%+ fiat loan rates.

What’s one strategy I can use?

• Unlock low-cost-basis bitcoin to invest in assets that may outperform bitcoin, like bitcoin treasury companies, without immediate taxes. Our co-founder Peter is doing this with a portion of his bitcoin, targeting significant returns. If your investments beat bitcoin’s growth plus 5%, you are obviously ahead.

• Note: Use only a portion of your stack for this targeted strategy.

What’s the loan term?

• The loan term is 12 months, renewable annually for up to 5 years, letting you extend your strategy while deferring taxes.

Do I need to outperform Bitcoin?

• For the outperformance strategy, your investments should beat bitcoin’s growth plus the 5% fee and any potential capital gains on the trade you’re putting on.

• If bitcoin grows 20%, your $950,000 investment needs >25% return +CGT to profit after repaying 10 bitcoin.

Is selling borrowed Bitcoin taxable?

• No. The borrowed bitcoin’s cost basis equals its sale price (e.g., $950,000 for 9.5 BTC at $100,000/bitcoin), so there’s no taxable gain.

Why not invest directly?

• Direct investments may require selling bitcoin (triggering taxes) or limit choices (e.g., ISAs). Loan My Coins offers tax deferment, flexibility, and minimal risk.

Is it for HODLing Bitcoin?

• No. Borrowing to HODL bitcoin costs 5% without upside. Loan My Coins is for strategies like investing to outperform bitcoin.

How risky is it?

• Ultra-low risk vs. fiat loans: minimal counterparty risk (you hold borrowed bitcoin), no margin calls, no liquidations. The main risk is investments underperforming or counterparty failure to return staked bitcoin, but the upfront bitcoin delivery lowers this significantly.

What if I can’t repay the Bitcoin after 12 months?

• If you don’t repay the loan, Meanwhile may retain your staked bitcoin. This could also be a taxable event, potentially triggering capital gains tax on your staked bitcoin. 

• You hold 9.5 bitcoin ($950,000) upfront, minimizing risk vs. fiat loans. No margin calls or liquidations apply. Plan to repay or roll for up to 5 years by staking an additional 5% per year.