Setting the standard for Bitcoin-backed loans.
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Joined October 2022
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Last quarter we shipped the first transparent, size-based rate table in crypto lending.
Today we go further.
Arch is dropping rates platform-wide and simplifying the size-tier structure for our clients.
We now have the lowest qualified custodian rates in our industry!
Governments hold about 594,000 BTC. 97.5% of it was seized in criminal cases. Only 1.3% was bought.
13 years of government Bitcoin in 60 seconds.
The US government seized about 174,000 Bitcoin from Silk Road and sold it for about $66 million. At today’s price of about $78,000, those coins would be worth roughly $13.6 billion.
Governments now hold about 594,000 BTC between them. Here’s how they got it.
Most of it was seized. Of the BTC held by the six governments in this chart, 97.5% came from criminal cases. Only 1.3% was bought.
The seizures:
- United States, 2013: about 174,000 BTC from Silk Road. Auctioned by November 2015, mostly for under $400 a coin.
- United Kingdom, 2018: 61,000 BTC from a Chinese investment fraud.
- China, 2020: 194,775 BTC from the PlusToken scam. Nobody has confirmed whether China still holds it.
- United States, 2020-2022: 69,370 from a Silk Road hacker, 50,676 from a Silk Road thief (some hidden in a popcorn tin), and 94,636 from the 2016 Bitfinex hack.
- United States, 2025: 127,271 BTC from the Prince Group scam, the DOJ’s largest forfeiture action.
The miners:
- Bhutan mined about 13,000 BTC on hydropower. After steady selling, about 518 remain.
- The UAE holds about 6,400 BTC traced to a state-linked mining company.
The buyer:
- El Salvador started buying in 2021, added 1 BTC a day from 2022, and now holds about 7,800.
The seller:
- Germany seized 49,858 BTC in January 2024. It sold all of it between June 19 and July 12 for about $2.9 billion. At today’s price, that’s about $3.9 billion.
Two governments sold their seized coins at what turned out to be low prices. Holders face the same choice whenever they need cash. Selling is one way to raise it. Borrowing against your Bitcoin is another, and it keeps the coins.
Founder holds 4 BTC bought in 2020 for $30,000.
Worth $304,000 today.
His startup needs $75,000 of runway.
If he sells 1 BTC, he triggers $67,500 in capital gains.
Pays $13,500 in tax.
Walks away with $62,500. His stack drops to 3 BTC.
Instead, he borrows $75,000 against the position.
LTV: ~25%. He keeps BTC exposure without triggering any sale.
Funds the runway.
Ships the product. Wins the customer.
Bitcoin compounds while he builds.
IRS gets $0.
You borrowed $60,000 against 1 BTC at $100,000. BTC falls 14.3%, and you get a margin call at 70% LTV. You have $8,571.
Repay part of the loan with it: LTV back to 60%.
Buy Bitcoin with it and add it: LTV only to 63.6%.
Same dollars, different result. Repaying takes a dollar straight off the loan. A dollar of BTC added only supports 60 cents of loan at a 60% LTV.
To reach 60% with Bitcoin, you’d need $14,286 of it, 1.67x the cash. That ratio holds at any BTC price.
So with cash on hand, repaying moves LTV the most per dollar. Adding Bitcoin fits when you already hold spare BTC and don’t want to sell.
Did you know that you can access more cash or get some of your collateral back when the price moves up?
A Bitcoin holder bought 4 $BTC for $26,000 in 2018.
They’re worth $308,000 today.
The down payment on the house is $100,000.
To net $100,000, he has to sell about 1.51 BTC.
Roughly $15,900 goes to federal capital gains tax.
Borrowing $100,000 against his 4 BTC starts at about a 32% LTV.
The cost is $10,490 in interest over 12 months.
He keeps all 4 coins.
IRS gets $0.
Illustrative: BTC at $77,000, 15% federal long-term rate, no state tax, 10.49% APR with interest paid monthly. Tax treatment depends on your situation.
Arch retweeted
Where was your bitcoin while it backed your loan?
At Celsius and plenty of other 2022 lenders, it was lent out again for extra yield. So when everyone wanted out at once, the coins weren’t there.
@hhsahay of @ArchLending with @21Bullish on First Principles
The US government seized about 174,000 Bitcoin from Silk Road and sold it for about $66 million. At today’s price of about $78,000, those coins would be worth roughly $13.6 billion.
Governments now hold about 594,000 BTC between them. Here’s how they got it.
Most of it was seized. Of the BTC held by the six governments in this chart, 97.5% came from criminal cases. Only 1.3% was bought.
The seizures:
- United States, 2013: about 174,000 BTC from Silk Road. Auctioned by November 2015, mostly for under $400 a coin.
- United Kingdom, 2018: 61,000 BTC from a Chinese investment fraud.
- China, 2020: 194,775 BTC from the PlusToken scam. Nobody has confirmed whether China still holds it.
- United States, 2020-2022: 69,370 from a Silk Road hacker, 50,676 from a Silk Road thief (some hidden in a popcorn tin), and 94,636 from the 2016 Bitfinex hack.
- United States, 2025: 127,271 BTC from the Prince Group scam, the DOJ’s largest forfeiture action.
The miners:
- Bhutan mined about 13,000 BTC on hydropower. After steady selling, about 518 remain.
- The UAE holds about 6,400 BTC traced to a state-linked mining company.
The buyer:
- El Salvador started buying in 2021, added 1 BTC a day from 2022, and now holds about 7,800.
The seller:
- Germany seized 49,858 BTC in January 2024. It sold all of it between June 19 and July 12 for about $2.9 billion. At today’s price, that’s about $3.9 billion.
Two governments sold their seized coins at what turned out to be low prices. Holders face the same choice whenever they need cash. Selling is one way to raise it. Borrowing against your Bitcoin is another, and it keeps the coins.
Arch retweeted
🎙️New episode of First Principles 🎙️
If you’ve ever thought about borrowing against your bitcoin instead of selling it, you’re going to want to listen to this one
Himanshu Sahay, co-founder of @ArchLending, joined me for a fascinating chat
💡Starting a bitcoin lender in the ashes of 2022
💡Why non-rehypothecation matters
💡Segregated custody vs proof of reserves
💡What actually happens during a margin call
💡Where loan capital really comes from
💡Structured products and the Bitcoin Accumulator
💡Will the banks get into bitcoin lending?
💡Spot bitcoin vs ETFs as collateral
Hope you have fun listening, have a great weekend!
🤖 Made with AI
Three ways to leave Bitcoin to your heirs:
Sell it. They get cash, minus the capital gains you paid.
Hold it. It can pass with a stepped-up basis.
Hold it and borrow against it. You fund your life without a sale.
Yesterday’s @binance hack pushed Bitcoin from $81,800 to a low of $76,370. Here’s what that did to a Bitcoin-backed loan at 60% starting LTV.
Loan taken at last week’s peak of $84,800:
A drop of almost 10% took LTV to 66.62%.
Loan taken at October’s peak of $87,000:
A drop of 12.22% took LTV to 68.35%.
Both stayed below the 70% margin-call threshold.
The second was close, and it’s a good reminder of what a margin call is.
A margin call is a warning with a 24-hour window to respond.
Partial liquidation only begins at 80%, and there is no full liquidation.
Read more here:
investing.com/analysis/bitco…
