Bitcoin infrastructure provider Maestro is launching a Bitcoin-denominated credit market backed by mining economics, aiming to give financial institutions a new way to earn yield on idle Bitcoin while expanding funding options for miners.
Maestro said Mezzamine launched its first program in partnership with mining-as-a-service provider Sazmining. According to an announcement Tuesday shared with Cointelegraph, the program will allow institutional investors to invest in Bitcoin ($BTC) holder expands $BTC Invest in mining-backed lines of credit with a target annual yield of 8% to 9%.
The service is designed to connect miners seeking capital with institutional Bitcoin holders seeking funding. $BTC– The denominated yield creates an on-chain credit market tied to mining expansion rather than protocol staking rewards.
“A new Bitcoin is mined every 10 minutes, using Mezzamine. $BTC Holders can earn block rewards and share them with miners,” Maestro co-founder and CEO Marvin Bertin said in the announcement.
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Bitcoin-native credit market aims to close funding gap for miners
Bitcoin mining companies often have limited financing options, typically relying on dollar-denominated debt backed by Bitcoin or, if publicly traded, issuing stock.
Because many miners’ debt is denominated in dollars and their revenue is earned in Bitcoin, that structure can make their operations more at risk during sharp market declines.
Maestro said the credit facility includes bear market protection features, including hedges related to Bitcoin prices and mining fleet economics, which can help stabilize performance during economic downturns.
The company said that in exchange for a structure designed to provide greater stability during economic downturns, miners could face higher financing costs when markets are strong.
Launch of the first Bitcoin native credit market for the mining economy. Source: Maestro
This service is aimed at institutional investors, corporate finance, asset managers, family offices, and registered investment advisors. Suresh Rajan, managing director of Mezzamine, told Cointelegraph that the minimum allocation is $100,000 worth of Bitcoin.
Mezzamin said the yield comes directly from mine production. Miners who borrow through the platform use their capital to purchase additional ASIC hardware and expand their hashrate. A portion of the resulting block reward is used to service the credit facility, and the rest flows to the miners.
According to Maestro, financial institutions will receive a yield based solely on mining output, without any additional token incentives or leverage strategies.
Related: Solo Bitcoin miner earns over $200,000 in block rewards using rental hashrate
Bitcoin-denominated loans reduce liquidation risk for miners
Bitcoin miners seeking traditional funding are often required to pledge more than twice as much collateral, increasing the risk of liquidation when Bitcoin prices fall.
The new credit facility will reduce that risk by providing Bitcoin-denominated loans and removing dollar-denominated call risk, Rajan, managing director at Mezzamine, told Cointelegraph.
“A fall in the price of Bitcoin against the dollar does not trigger a margin call, and with Mezzamine’s hedging instruments, hedging can actually return profits in a bear market, supplement mining revenues and further leverage the program.”
He added that “loans will be disbursed based on the mining economy and not on the exchange market.”
Maestro told Cointelegraph that he has witnessed over 1,500 cases so far. $BTC Borrowing demand from qualified mining operators seeking alternative financing channels, including public miners and mid-market operators.
Sazmining describes itself as a Bitcoin mining-as-a-service provider that relies on hydroelectric power and other carbon-free energy sources to operate.
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