Example

Based on the following assumptions:

1. BSV depreciates by 26% annually in USD terms.
2. BTC appreciates by 100% in USD terms, increasing to $200,000 after 1 year.
3. We will use multiple rounds of borrowing and swapping to achieve 2x the original BTC collateral (2 BTC total).

Updated BSV Price After 1 Year:

1. Initial BSV Price: $58.
2. Annual BSV Depreciation (USD): 26%.
3. Final BSV Price (USD): Final BSV Price=58×(1−0.26)=58×0.74=42.92USD.

Final BSV Price=58×(1−0.26)=58×0.74=42.92 USD.\text{Final BSV Price} = 58 \times (1 - 0.26) = 58 \times 0.74 = 42.92 \, \text{USD}.

Step-by-Step Calculation:

Step 1: Borrowing and Swapping

We previously calculated that multiple rounds of borrowing result in:

• Total BTC Accumulated: 2.53 BTC (including the original 1 BTC).
• Total BSV Borrowed: 1,207+845+591≈2,643BSV.

1,207+845+591≈2,643 BSV.1,207 + 845 + 591 \approx 2,643 \, \text{BSV}.

Step 2: Debt in USD Terms After 1 Year

1. Final BSV Price: $42.92.
2. Total Debt in USD: Debt in USD=2,643×42.92≈113,463USD.

Debt in USD=2,643×42.92≈113,463 USD.\text{Debt in USD} = 2,643 \times 42.92 \approx 113,463 \, \text{USD}.

Step 3: Debt in BTC Terms (Adjusted for BTC Price Appreciation)

1. Final BTC Price: $200,000.
2. Debt in BTC Terms: Debt in BTC=BTC PriceDebt in USD​=200,000113,463​≈0.567BTC.

Debt in BTC=Debt in USDBTC Price=113,463200,000≈0.567 BTC.\text{Debt in BTC} = \frac{\text{Debt in USD}}{\text{BTC Price}} = \frac{113,463}{200,000} \approx 0.567 \, \text{BTC}.

Step 4: Net BTC Holdings

1. Total BTC Accumulated: 2.53 BTC.
2. Debt in BTC Terms: 0.567 BTC.
3. Net BTC Holdings: Net BTC=Accumulated BTC−Debt in BTC=2.53−0.567≈1.963BTC.

Net BTC=Accumulated BTC−Debt in BTC=2.53−0.567≈1.963 BTC.\text{Net BTC} = \text{Accumulated BTC} - \text{Debt in BTC} = 2.53 - 0.567 \approx 1.963 \, \text{BTC}.

Step 5: USD Value of Net BTC Holdings

1. Final Net BTC Holdings: 1.963 BTC.
2. Final BTC Price: $200,000.
3. Net USD Value: Net USD Value=1.963×200,000≈392,600USD.

Net USD Value=1.963×200,000≈392,600 USD.\text{Net USD Value} = 1.963 \times 200,000 \approx 392,600 \, \text{USD}.

Return Calculations

BTC Return:

1. Initial BTC: 1 BTC.
2. Final BTC: 1.963 BTC.
3. BTC Return: BTC Return=Initial BTCFinal BTC−Initial BTC​×100=11.963−1​×100≈96.3%.

BTC Return=Final BTC−Initial BTCInitial BTC×100=1.963−11×100≈96.3%.\text{BTC Return} = \frac{\text{Final BTC} - \text{Initial BTC}}{\text{Initial BTC}} \times 100 = \frac{1.963 - 1}{1} \times 100 \approx 96.3\%.

USD Return:

1. Initial USD Value: $100,000.
2. Final USD Value: $392,600.
3. USD Return: USD Return=Initial USD ValueFinal USD Value−Initial USD Value​×100=100,000392,600−100,000​×100≈292.6%.

USD Return=Final USD Value−Initial USD ValueInitial USD Value×100=392,600−100,000100,000×100≈292.6%.\text{USD Return} = \frac{\text{Final USD Value} - \text{Initial USD Value}}{\text{Initial USD Value}} \times 100 = \frac{392,600 - 100,000}{100,000} \times 100 \approx 292.6\%.

Summary:

• Net BTC Holdings: 1.963 BTC.
• BTC Return: 96.3%.
• USD Return: 292.6% (final value = $392,600).
• Never sell your original BTC (no taxable event)