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.
FAQ
What does the BTC-to-debt coverage ratio tell me? Coverage is the market value of the company's Bitcoin divided by its net debt (total debt minus cash). A coverage of 5x means the coins are worth five times the debt, so the balance sheet can absorb a large drawdown before the debt becomes a problem. Coverage of 1.2x means a roughly 20 percent fall in Bitcoin wipes out the cushion and the company can no longer cover its borrowings by selling coins. The lower the coverage, the more a Bitcoin-treasury stock behaves like a leveraged, potentially forced seller rather than a patient holder.
What is the forced-sale Bitcoin price? It is the Bitcoin price at which the entire treasury, sold in full, exactly covers net debt — net debt divided by the number of coins held. Below that price the company's coins are worth less than what it owes, so a debt maturity that must be repaid in cash can only be met by selling coins into a falling market, raising equity at a depressed price, or refinancing. Distance between today's price and the forced-sale price is the real solvency buffer, and it is what this calculator makes explicit.
Do convertible notes dilute shareholders or have to be repaid in cash? It depends entirely on the share price at maturity versus the conversion price. If the stock is above the conversion price the notes convert into equity — no cash leaves the company, but existing shareholders are diluted by roughly the face value divided by the conversion price in new shares. If the stock is below the conversion price the notes are out of the money and must be repaid in cash, which is the more dangerous scenario for a treasury company because it can force a Bitcoin sale. A common mistake is to assume all convertible debt dilutes; out-of-the-money notes are a cash obligation, not dilution.
How is this different from an mNAV calculator? An mNAV calculator values the stock — how many dollars the market pays for each dollar of Bitcoin on the balance sheet. This calculator stress-tests the balance sheet itself: whether the company can survive its debt, at what Bitcoin price it becomes a forced seller, and whether its convertible notes convert or demand cash. Valuation tells you if the stock is expensive; solvency tells you if the company can hold through a bear market without being forced to sell its coins. Use both — a cheap mNAV means little if a debt wall forces liquidation at the bottom.