BTC Now is the first warehouse facility originating consumer Bitcoin installment purchase plans with a clear path to asset-backed securitization. The fund captures the spread between consumer borrower payments (12-18% APR) and institutional bond coupons (~7%), delivering best-in-class returns for private credit.
| Asset Class | Market Value | Debt Outstanding | Leverage |
|---|---|---|---|
| US Real Estate | $55T | $13T | 23% |
| US Autos | $6T | $1.5T | 25% |
| Bitcoin | $2.2T | $0 | 0% |
If Bitcoin reaches even half the leverage ratio of real estate or autos, that implies a $440-550 billion credit market. Target addressable market: 36-45M Americans with FICO 620+ who own crypto. At 5% penetration and $40K average: $72-90 billion.
Basel III classifies Bitcoin as a Group 2 cryptoasset with a 1,250% risk weight — the maximum possible under international banking rules. A $100M Bitcoin lending portfolio requires banks to hold $125M in Tier 1 capital: more capital than the loans themselves. This makes direct Bitcoin lending economically impossible for regulated banks.
This is not a temporary policy position. The framework was strengthened in 2023. Changing it requires coordination across 28 jurisdictions on a 5-10 year timeline. BTC Now operates outside bank capital requirements via a private fund structure. This is the moat.
Consumers purchase Bitcoin through fixed monthly installment plans. They receive Bitcoin immediately (held in institutional custody with transfer restrictions), make fixed monthly payments, and own it outright after the final payment. Loans are originated as cash via a sponsor bank; the fund purchases the loan paper (installment plan receivables).
Zero liquidation risk. Fixed dollar payments regardless of Bitcoin price. No margin calls, no forced liquidations. Each customer receives a dedicated Bitcoin address — no pooling of assets.
Key advantage: Small, granular consumer plans create high diversification — thousands of independently underwritten customers per tranche, reducing single-customer default impact and enhancing securitization appeal.
Bitcoin doesn't depreciate like a car, doesn't require months of foreclosure like a house, and isn't unsecured like a personal loan. It is a 24/7 liquid asset recoverable in minutes.
| Factor | Auto Loans | Mortgages | BTC Now |
|---|---|---|---|
| Collateral Depreciation | 20-40% over loan life | Market-dependent, illiquid | Market value, highly liquid |
| Recovery Value | 30-50% of original | 60-80% (foreclosure) | 100% market value |
| Liquidation Speed | Weeks (auction) | Months (foreclosure) | Minutes (24/7 markets) |
| Loss Given Default | 50-70% | 20-40% | 25-40% |
| Collateral Reuse | Depreciating resale | REO inventory costs | Reissuable at market value |
BTC Now Inc. is the General Partner. The spread between borrower payments (12-18% APR) and bond coupons (~7%) flows to the warehouse fund for LP returns. The GP earns revenue through fees only — zero carry / zero performance fee.
| Fee | Rate | Description |
|---|---|---|
| Management Fee | 2.0% of NAV | Payable quarterly in advance |
| Origination Fee | 1.0% | At origination, per funded amount |
| Servicing Fee | 1.5% annually | On outstanding principal & interest, paid monthly |
| Performance Fee / Carry | 0% | Zero carry — intentional |
| Operating Expenses Cap | 0.5% of NAV | Excess borne by GP |
| Subscription / Redemption | 0% | No entry or exit fees |
Why zero carry? Intentional. No performance fee makes the fund more attractive to LPs — removes the single biggest barrier to raising capital quickly. It also keeps the fee structure clean enough to enable a future ETF listing path. Most private credit funds cannot list as ETFs because their carry structures make conversion prohibitively complex.
Reporting: Monthly NAV (within 15 business days), quarterly LP reports, annual Big 4 audit. Fund administrator: NAV Fund Services.
Warehouse capital deploys in sequential $100M tranches. Each tranche follows the same cycle:
30% credit enhancement protects bond investors (comparable to Affirm 2024-B at 27%, significantly better than subprime auto at 55-60%).
$150M warehouse supports 12 sequential tranches through capital recycling. At $1B warehouse capacity: $12B total BBS origination capacity.
BTC Now's structure turns defaults into recoverable events rather than permanent capital losses. Three recovery layers protect the warehouse and bond investors.
$100K Bitcoin purchase. Default at month 36. Bitcoin down 20% from origination.
Self-healing warehouse: Recovered Bitcoin is re-issued to new customers at current market pricing without deploying fresh capital. Traditional lenders must raise new capital for every new loan; BTC Now regenerates origination capacity automatically.
| Scenario | BTC Terminal | Default Rate | LP IRR | Final NAV |
|---|---|---|---|---|
| Bull | $500K | 3% | 18.4% | $541M |
| Base | $200K | 5% | 17.8% | $528M |
| GFC | $120K | 54% | 15.2% | $431M |
| Bear | $30K | 45% | 13.3% | $372M |
| Stress | $10K | 70% | 8.0% | $263M |
All scenarios assume $150M initial deployment, 10-month seasoning per tranche, unleveraged. Final NAV represents 10-year cumulative value. Methodology: 10K Monte Carlo paths (Rust), Geometric Brownian Bridge, day-by-day cashflow simulation.
Key insight: Bitcoin price drives returns more than default rates. GFC scenario (54% defaults, BTC $120K) outperforms Bear (45% defaults, BTC $30K) because collateral value at liquidation matters more than default frequency.
Even without securitization, the hold-to-maturity floor is 14.2% IRR (base case) — proving the model works purely on payment collection. Full stress test models: model.btcnow.com
Demand for Bitcoin-backed debt is already proven at institutional scale — but concentrated in single-counterparty corporate bonds.
The problem: All of this debt is concentrated single-counterparty risk. One balance sheet, one management team, one stock price.
BTC Now's answer: Diversified risk across thousands of individual FICO-scored consumer loans, each independently underwritten with 100% Bitcoin collateral. Same underlying asset, fundamentally better risk structure.
Better returns (~17% IRR vs 0-1% corporate bond coupons), better risk profile (diversified consumer pool vs single-counterparty), same thesis (Bitcoin's long-term value).
Core team has executed together 10-15 years across regulated funds, sovereign debt, and trading infrastructure.
Key hires joining at close: Mateusz Goslinowski (Head Credit Risk & Quant, ex-Standard Chartered) and Jonathan Thaler (Head Securitization Infra, Enterprise Architect Swiss Social Security, PhD CS).
Legal counsel: Baker Donelson (Anastasia Stull / R. Colgate Selden) — banking & regulatory compliance.
Most private credit funds have no exit. This one was designed with one from day one.
A public listing converts LP positions from illiquid fund interests to tradeable securities — creating real liquidity in a market that has none. Early LPs benefit most: they enter at NAV and exit at market premium.
No Historical Performance. BTC Now is newly formed with no operating track record. Projected returns are based on financial modeling; actual results may differ materially.
Key risks: Customer defaults (primary), Bitcoin price volatility, bond market demand for novel asset class, regulatory changes, and operational execution. Structure stress-tested to survive 70% lifetime defaults + 90% BTC crash via first-loss equity, collateral liquidation, and credit reporting deterrence.
Rating timeline: Base case assumes 10-month unrated seasoning for all tranches. Egan Jones rating requires 12 months. Moody’s/Fitch investment grade requires 4-5 years of demonstrated performance.
Legal Disclaimer. This document is provided for discussion purposes only and does not constitute an offer to sell or solicitation of an offer to buy securities. Investment in the Fund involves significant risks, including loss of principal. The securities offered have not been registered under the Securities Act of 1933 and are available only to accredited investors and qualified purchasers.
Building the credit layer for the world's most valuable asset.