Arch launches TaxShield product to help Bitcoin holders reduce U.S. taxes through mining investments

ChainCatcher reported that cryptocurrency lending company Arch has launched the TaxShield product, aimed at helping high-income BTC holders reduce their tax burden by investing in mining hardware.

This product leverages the bonus depreciation provision under U.S. tax law IRS §168(k), allowing investors to deduct the cost of mining equipment from their taxable income. Specifically, users pledge bitcoin as collateral to obtain an overcollateralized loan from Arch, then purchase and host mining machines through Blockware. Investors can fully deduct the purchase cost in the first year while continuing to receive BTC mining rewards. Arch co-founders Himanshu Sahay and Dhruv Patel stated that clients with $1 million in taxable income could reduce their federal tax burden by approximately $400,000. The product was developed in collaboration with well-known bitcoin educator Mark Moss and Blockware, and is primarily targeted at high-net-worth digital asset holders.