American Bitcoin uses an overvalued BTC collateral to buy mining machines, implying a discount of 44%

Listed Bitcoin miner American Bitcoin (American Bitcoin) disclosed in its latest quarterly financial report that in February it pledged 314 BTC as collateral to pay 80% of the miner-equipment purchase payment of $49.4 million to Bitmain. The batch of agreements was valued at $125,900 per BTC, but at the time the actual transaction price was below $70k. ABTC therefore purchased the mining rigs at an implied discount of about 44%.

Transaction Structure Breakdown: How an Overvalued BTC Creates an Implied Discount

The items purchased this time were approximately 11,298 Bitmain S21 XP ASIC miners, with total hashrate of about 3.05 EH/s. The transaction structure is divided into two parts: ABTC pays 80% using BTC pledged at an inflated valuation, and the remaining 20% is paid one year after shipment. The remaining payment can be made in cash, with additional pledged BTC, or a combination of both.

The core logic behind the discount lies in the valuation gap: ABTC pledges BTC at an agreed valuation of $125,900 per BTC, while the market price at the time was below $70k. Measured by market value, the actual cost of the pledged BTC was far lower than the nominal amount, effectively equivalent to buying the mining rigs at a discount price.

Under the agreement, during a redemption period of about 24 months, Bitmain is not allowed to liquidate the pledged BTC (unless ABTC voluntarily chooses to forgo redemption), ensuring ABTC retains effective control of the BTC during the redemption period.

Redemption Options: BTC Price Movement Determines ABTC’s Final Gain or Loss

In effect, this deal constructs a long-term call option for ABTC on the pledged BTC:

· If, at the end of the redemption period, BTC is above $125,900, ABTC chooses to repay the debt in cash, reclaim the pledged BTC, and fully retain the capital appreciation gains on the BTC. Bitmain then fully recovers the miner-sale proceeds in cash.

· If, at the end of the redemption period, BTC is below $125,900, ABTC may choose to forgo redemption. Bitmain will then hold BTC whose value is below the original transaction amount, bearing part of the market risk from BTC’s decline.

At its core, this structure is a composite financial transaction—“mining rigs in exchange for a call option on BTC”—showing how, after the ASIC hardware market cooled from its peak, the financial-engineering approach behind miners’ purchase agreements is evolving.

As of March: ABTC Has Pledged 3,090 BTC to Bitmain

Cumulative details of ABTC’s pledged BTC used to buy mining rigs:

2025 (Hut 8 agreement transfer): up to $320 million, purchasing up to 17,280 mining rigs (14.86 EH/s), mainly through pledging BTC

Subsequent batches: pledge 2,234 BTC to purchase 16,299 mining rigs (14.02 EH/s); additionally, 151 BTC for later batches

October 2025: add pledge of 391 BTC, obtaining a $46 million security deposit returned by Hut 8 (NASDAQ: HUT)

February 2026: an additional 314 BTC pledged this time, purchasing 11,298 S21 XP mining rigs (3.05 EH/s)

As of March 31, 2026: a total of 3,090 BTC has been pledged to Bitmain, with a fair value of about $210.8 million; corresponding mining-rig purchase liabilities of about $364.3 million

FAQ

How exactly does ABTC’s BTC-collateralized miner purchase structure work?

ABTC pledges BTC to Bitmain at an agreement valuation far higher than the market trading price as the payment method for miner procurement. Bitmain holds the BTC as collateral and may not liquidate it during the 24-month redemption period. Before the term ends, ABTC may choose to redeem in cash, or abandon redemption and let Bitmain hold the BTC—effectively providing ABTC with a long-term call option on the pledged BTC.

How is the 44% implied discount calculated?

ABTC pledges 314 BTC with an agreement valuation of $125,900 per BTC, but the market price at the time was below $70k. At actual market pricing, the market value of 314 BTC was far lower than the nominal amount in the agreement. This is equivalent to ABTC having an actual cost of about 56% of the market valuation and paying 80% of the nominal amount, resulting in an implied purchase discount of about 44%.

If BTC is below the agreement valuation at the end of the redemption period, what will ABTC do?

ABTC may choose to forgo redemption, effectively “paying” the miner fee with BTC after the market value has fallen. ABTC loses the future upside potential of these BTC, while Bitmain holds BTC valued below the original equipment selling price and bears part of the price-decline risk. This structure design reflects the risk-sharing logic between both parties in an uncertain market environment.