Can borrowing against Bitcoin create income without giving up the BTC?
Model a strategy that borrows against Bitcoin, deploys the proceeds into income-producing preferred equity, and compares the resulting cash flow and modeled wealth with simply holding the Bitcoin.
How this calculator works
Choose the Bitcoin-backed loan's LTV and APR, then model 12-month terms with annual refinancing, capitalized or interest-only payments, and either STRC or SATA preferred equity as the income asset.
Set up the strategy
Choose the income asset, loan amount, financing assumptions, Bitcoin growth assumption, and modeling period.
Financing assumptions
Adjust the collateral ratio and borrowing cost used throughout the model.
Interest structure: choose whether interest is added to the refinanced loan balance or paid monthly from cash flow.
Modeled outcome
Compare the strategy's annualized wealth growth with the selected BTC growth assumption used for a simple HODL baseline.
- modeled net position
Waiting for a live Bitcoin price to complete the model.
What this means
Adjust the assumptions above to see how BTC growth, loan structure, and preferred-equity yield change the modeled outcome.
Detailed comparison
Review the mechanics behind the headline result and how the loan balance and monthly cash flow behave over time.
Strategy economics
How the modeled strategy works
Three steps connect the Bitcoin collateral, preferred-equity income, and annual loan refinancing.
Borrow against Bitcoin
The model sizes BTC collateral using your selected LTV. Capitalized interest requires more collateral at inception because the first year's interest is included in the loan of record.
Deploy proceeds into STRC
The loan proceeds are modeled as purchasing STRC at par and generating 11.5% annual distributions.
Refinance annually
Capitalized interest grows the loan balance at each annual refinance. Interest-only keeps principal flat while monthly interest reduces the cash distribution available to the borrower.
Methodology, assumptions, and exclusions
- The selected loan amount is deployed into the selected preferred equity. BTC collateral is sized using the user-selected LTV ratio.
- For capitalized interest, the first year's interest at the selected APR is included in the initial loan of record and collateral requirement. The balance then increases at each annual refinance.
- For interest-only, principal remains flat and monthly interest at the selected APR is deducted from preferred-equity distributions.
- Preferred equity is modeled at par for the entire period. No market-price appreciation or decline is included.
- Distribution rates are assumed to remain constant. Actual distributions may change.
- The BTC growth input is hypothetical and is applied to the posted Bitcoin collateral for the full period.
- The model does not separately include margin calls, liquidation thresholds, collateral top-ups, fees, taxes, custody costs, security-price volatility, refinancing availability, or counterparty risk.
- Strategy CAGR uses total modeled ending wealth relative to the initial BTC collateral value. Intermediate cash distributions are not assumed to be reinvested.