In the 2021 and 2022 Bitcoin bull market, ASIC-backed loans – a form of debt secured by bitcoin mining computers – were all the rage for the U.S.’s burgeoning bitcoin mining sector. But when bitcoin prices took a turn for the worse, and drug bitcoin mining revenue down with it, many of these loans soured, with debtors defaulting and creditors seizing and running ASICs to pay back the loans.
Fast forward to 2025, and now, Coinbase’s (NASDAQ: COIN) independent subsidiary Coinbase Asset Management is reimaging ASIC-backed financing. Only this time, they’re not securing the loans against the computers – they’re backing them with entire datacenters and bitcoin in what the company calls a “flexible collateral package.”
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Coinbase Asset Management now offers bitcoin mining loans with flexible collateral
Coinbase Asset Management has rolled out bitcoin mining financing with a flexible collateral package that accepts hashrate, physical infrastructure, and bitcoin as forms of collateral.
The structure allows for up to 50% hashrate and 50% digital collateral for credit-worthy borrowers. Historically, bitcoin miners, mostly the publicly traded ones, have relied heavily on equity financing or rudimentary credit products.
Traditional Bitcoin backed loans typically feature a loan to value (LTV) ratio between 50% and 70%. These structures often include margin requirements where a decline in Bitcoin price necessitates posting additional collateral to avoid liquidation.
Coinbase Asset Management operates as a wholly owned subsidiary of Coinbase Global and is a registered investment advisor with the CFTC and SEC.
Lending against the car, not the engine: Coinbase Asset Management’s approach to bitcoin mining loans
Coinbase acquired the entity – previously named One River Digital Asset Management – in the Q1 2023. The team views Bitcoin mining as a commodity industry characterized by inevitable booms, busts, and recoveries.
With that in mind, Coinbase Asset Management is devising capital market offerings for bitcoin miners to deliver them similar financial tooling available to other commodity producers. Unlike lenders in the previous cycle that focused on individual machine financing, Coinbase Asset Management evaluates hashrate as a finished product that includes ASICs, land, transformers, and electrical infrastructure.
“We think about [bitcoin mining] ASICs like a car engine. You might not want to lend against a car engine, but you might want to lend against a car,” Wilson said on a new episode of The Mining Pod.
Coinbase Asset Management will focus on bitcoin mining, not AI datacenters
While many public miners are diversifying into high performance computing (HPC) and AI, Coinbase Asset Management intends to stay in its lane regarding the digital economy. Wilson noted that HPC data centers represent a different business vertical requiring different expertise. The firm prefers to engage with processes they understand deeply, specifically earning yield in Bitcoin and stablecoins.
Stablecoins are viewed as a killer app for institutions due to their ability to lower transaction costs and increase settlement speed. Tokenization and smart contracts are expected to minimize back office functions and accounting lags that plague traditional finance. Looking ahead, regulatory clarity and specific tax codification for digital assets remain the primary hurdles for broader institutional adoption, Wilson concluded.
