- Nakamoto’s roughly 3,000 pledged bitcoin were worth about $208 million at Friday’s price below $69,000, or approximately 126% of its outstanding loan.
- Kraken will now include the net value of Nakamoto’s pledged derivatives account in daily collateral tests, while treating any net negative value as zero.
- Nakamoto’s $210 million loan began last December at an 8% annual interest rate, backed by nearly 5,400 bitcoin.
Nakamoto’s Bitcoin Loan Gains New Derivatives Terms
At Friday’s bitcoin price of less than $69,000, Nakamoto’s pledged holdings were worth roughly $208 million, according to CoinDesk calculations. That represented about 126% of the amount Nakamoto owes under its loan from Kraken.
The loan agreement requires Nakamoto to take action if the value of its collateral falls below a specified maintenance level. Depending on the terms, Nakamoto must repay part of the loan, provide additional bitcoin as collateral, or do both. The company has approximately 1,253 unpledged bitcoin remaining that it could pledge, with those coins worth about $86 million at Friday’s price.
Kraken to Include Derivatives Account in Collateral Tests
Under the revised terms, Kraken calculates the net value of Nakamoto’s pledged derivatives account every day and applies that value to the loan’s maintenance tests. Any net negative value is treated as zero, meaning losses in the derivatives account cannot reduce the collateral value used in the calculations.
Nakamoto’s derivatives position included options tied to thousands of bitcoin. At the end of September, Nakamoto had sold call options on 2,150 bitcoin with strike prices ranging from $80,000 to $110,000. The company received premiums for those contracts in return for giving up gains above the specified prices.
Nakamoto had also purchased put options on 2,000 bitcoin at a $55,000 strike price. Those options expire on Dec. 25. The overall derivatives book had a value of negative $6 million at the end of the quarter, which would have contributed nothing under the revised collateral terms.
How Nakamoto’s Loan Position Changed
Kraken originated the loan last December at $210 million with an annual interest rate of 8%, when Nakamoto held nearly 5,400 bitcoin. Nakamoto sold 284 $BTC in March to finance operations and sold approximately 600 additional bitcoin during the second quarter.
Nakamoto returned $45 million from those sales to Kraken. The transactions reduced the company’s bitcoin holdings while providing funds for operations and loan repayment, leaving the remaining pledged bitcoin central to its ability to satisfy Kraken’s collateral requirements.
Why This Matters
The revised terms show how Nakamoto’s bitcoin-backed borrowing is being assessed alongside its derivatives positions. Because Kraken now reviews the pledged derivatives account daily, changes in the value of Nakamoto’s options can affect the collateral calculations used to monitor the loan. However, a negative net derivatives value is floored at zero rather than counted as an additional shortfall.
Nakamoto’s remaining unpledged bitcoin provides a potential source of additional collateral if the value of its pledged holdings falls below the maintenance level. The company’s ability to meet the loan conditions will therefore depend on the value of its bitcoin holdings, its outstanding debt and the daily treatment of its pledged derivatives account.
Frequently Asked Questions
How much was Nakamoto’s pledged bitcoin worth?
The pledged bitcoin was worth roughly $208 million at a price below $69,000 on Friday.
What happens if the collateral falls below the maintenance level?
Nakamoto must repay part of the loan, pledge more bitcoin, or take both actions, depending on the applicable loan requirements.
What options did Nakamoto hold?
At the end of September, Nakamoto had sold call options on 2,150 bitcoin at strike prices between $80,000 and $110,000 and bought put options on 2,000 bitcoin at $55,000 that expire Dec. 25.
