A monthly routine: payouts arrive in BTC, you convert the share you need to the loan currency, repay, and track what is left.
Intermediate
A loan against bitcoin is easier to carry when something pays it down every month. Your machines can be that something. Payouts arrive in BTC, the loan is in dollars or a dollar token such as USDC, and a simple monthly routine connects the two.
Careful: Borrowing against bitcoin can lose the collateral. Mining income is not guaranteed: it depends on bitcoin's price, network difficulty and uptime. A repayment plan built on mining needs a fallback. This guide is education, not advice.
Before you start
Know your loan: the currency you owe (for example USDC or dollars), the interest, and whether early or partial repayment is allowed. On Aave you can repay any amount at any time.
Know your mining: the Earnings page shows what your machines mined each month.
Remember that mining also has to cover your hosting invoice. Plan the loan repayment from what is left after it.
The monthly routine
Pick a date. The same day every month, after your hosting invoice is settled.
Read the month. Open Earnings and note what was mined and paid out.
Decide the share. Choose in advance what part of the month's mining goes to the loan, or a fixed dollar amount. Keeping to the rule matters more than the exact number.
Convert only that share. Sell that amount of BTC for the loan's currency at an exchange. For an on-chain loan, withdraw the dollar tokens to the wallet that holds the position, on the right network. See Cash out overview.
Repay. With a custodial lender, pay the way the lender instructs. On Aave, use Repay under Your borrows, or the portal's Borrow page when the feature is on for your account.
Check the result. Look at the new balance and the new health factor or LTV.
Good to know: The rest of the month's bitcoin stays yours to keep. The routine sells only what the plan calls for.
Track it
A simple sheet is enough. It shows the loan shrinking, and it gives you the records you will want at tax time. Selling BTC to repay a loan may be a taxable event where you live: see Tax records for mined bitcoin and ask a tax professional.
Date
BTC sold
Repaid
Loan left
Month 1
Amount and price
In the loan currency
Balance after
Month 2
Amount and price
In the loan currency
Balance after
Interest first
If your repayment is smaller than the interest added that month, the loan grows. As a minimum, aim to cover the interest, then reduce the amount borrowed with whatever is above it. With a variable rate, check the current rate each month: it may not be what it was when you borrowed.
When mining income dips
Mining income moves. A lower bitcoin price, a rise in network difficulty, a halving or a machine offline for repair all reduce a month's payouts. A lower price hurts twice: the mining buys fewer dollars, and the collateral is worth less at the same time.
Keep a buffer. One to three months of repayments, held in the loan's currency, covers a weak stretch without a forced sale.
Watch the health factor, not only the payment. In a falling market the top-up matters more than the schedule. See Health factor and liquidation.
Do not borrow more to make a repayment. That raises the risk at the worst moment.
If a machine is offline, check My miners and contact us. The sooner it is hashing, the sooner the routine is back.
If the plan no longer fits, repaying a larger part at once, even by selling some bitcoin, can cost less than a liquidation.
Automating the watch
Firsthand's auto-loan rules can propose the monthly repayment for you, sized as the share of mining income you set, for your wallet to sign. The feature is being rolled out and may be off for your account. See Auto-loan explained.