The 2x BTC Leverage via #BitcoinBackedLoan – Thought Experiment

- Starting Collateral: 0.3 BTC

- Strategy: Use recursive 50% Loan-to-Value (LTV) borrowing to double BTC exposure.

- Goal: Maximize BTC holdings without selling, using borrowed fiat to buy more BTC, looped back as collateral.

The Math Behind the 2x

At 50% LTV, each loop lets you buy half as much BTC as the previous one:

- 0.3000 BTC (initial)

- +0.1500 BTC (1st borrow)

- +0.0750 BTC

- +0.0375 BTC

… etc.

This geometric series converges to 0.6 BTC — exactly 2x leverage (from 0.3 to 0.6 BTC exposure).

But Fees Change the Risk Profile

Assume:

- 2% Capital Charge (one-time, added to loan principal)

- 5% Interest (APR, compounding daily)

- Liquidation threshold: 85% LTV

If you borrow 0.3 BTC worth in fiat, a 2% fee adds 0.006 BTC worth to your debt — so total loan = 0.306 BTC.

Now your true LTV = 0.306 / 0.6 = 51%, not 50%.

You’ve lost 2.85% of your liquidation buffer before interest accrues.

Interest will further erode your buffer unless BTC price rises or you repay.

So. Yes, 2x #bitcoin leverage via recursive loans is mathematically sound. But fees and compounding interest push you closer to liquidation risk.

Only use this strategy with:

- Tight monitoring

- Low interest & fee platforms

- Strong belief in BTC price appreciation

- A plan to de-leverage if markets dip

#MiniMicrostrategy