Balance-sheet snapshot
The coin value, the net debt it has to cover, the price at which those coins stop covering it, and the share of the stack a full cash repayment would consume today.
| Metric | Value |
|---|
Coverage under a Bitcoin drawdown
Debt is fixed in dollars; the coins are not. As the price falls, coverage shrinks and the share of the stack needed to repay climbs — until, past the forced-sale price, the coins can no longer cover the debt at all.
| Coin price | Coverage | % of stack to repay |
|---|
Why the debt, not the price, decides survival
Bull-market coverage looks comfortable at almost any leverage, which is exactly why it lulls people. The debt is denominated in dollars and does not move; the treasury is denominated in coins and can halve in a quarter. When the price falls the coverage ratio compresses faster than the price — a stack worth 5× the debt at the top can be worth barely more than the debt after a 70% drawdown, and at that point any maturity that must be paid in cash turns the company into a forced seller at the worst possible moment. The convertible-note structure is the escape hatch: while the share price sits above the conversion price the notes turn into equity and no cash leaves the building, so the only cost is dilution. But a bear market usually drags the stock below the conversion price at the same time it drags Bitcoin down, and out-of-the-money notes are a cash bill, not dilution. That is the trap this calculator is built to expose. Pair it with the fully-diluted mNAV calculator for the valuation side and the DAT premium payback calculator for the shareholder's return math.
The math
Let the company hold H coins at price P, with total debt D and cash C. Net debt is ND = D − C and the coin value is V = H × P. The coverage ratio is simply V ÷ ND: how many times the treasury covers what is owed after cash. The forced-sale price is the level where the whole stack, sold in full, exactly meets net debt: P* = ND ÷ H. Below P* the coins are worth less than the debt. To repay net debt in cash today the company must sell ND ÷ P coins, which is 1 ÷ coverage of the stack — so 5× coverage means selling a fifth, and 1.25× coverage means selling four-fifths.
The convertible notes resolve one of two ways at maturity. If the share price S is at or above the conversion price K, the notes convert: they become roughly D ÷ K new shares, diluting existing holders by (D ÷ K) ÷ shares, and no cash is required. If S < K the notes are out of the money and must be redeemed in cash — the company either has the cash, refinances, raises equity into weakness, or sells coins. Coverage says whether selling coins is even sufficient; the forced-sale price says at what point it stops being. This is a simplified, single-tranche model: real treasuries stack multiple maturities, coupons, and preferred stock, and it assumes debt is a hard obligation rather than modelling call/put windows — treat it as a first-order solvency screen, not a credit rating.