Satoshi Institute · treasury stress test
A Bitcoin treasury rarely dies from the drawdown itself. It dies when the drawdown lands at the moment the company needs cash, reserves run dry, and it's forced to sell at the bottom. This finds the line where that happens.
Liquid reserves cover every obligation across 18 months. The Bitcoin is never touched, so the drawdown is a paper loss you can hold through.
Max safe allocation
Reserves run dry
Trough BTC price
Ruin price
Scenario modeling, not investment, treasury, or financial advice. Every output depends entirely on the assumptions entered above, and a real treasury faces lumpy cash flows, covenants, and tax effects this simplifies away. Recovery on trend uses the power-law fit and is an illustration, not a forecast. Decisions and their consequences are yours.
FAQ
The phrase "long-term holder" obscures the most important question: does the holder have the ability to hold?
A forced seller is any entity that must liquidate a position regardless of price — because of margin calls, regulatory capital requirements, covenant breaches, board mandates, or liquidity needs that can't be met any other way. The market doesn't care about your investment thesis when the covenant fires.
Why this matters more than volatility tolerance:
Volatility tolerance is a psychological concept. Forced-seller thresholds are structural. A company that allocates 5% of treasury to Bitcoin and holds $50M in cash has a very different survival envelope than one that allocated 30% and has thin operating cash. Both might say they're "comfortable with volatility." Only one has actually stress-tested whether they can survive a 70% drawdown without a forced exit.
Bitcoin's worst historical drawdowns:
The tool models how long a treasury can absorb drawdown at a given allocation before cash needs force a sale. The output isn't a prediction — it's a structural constraint. If your number is below the historical worst-case, that gap is a board-level conversation, not a financial planning assumption.
Methodology
Solves for the BTC drawdown depth at which reserves can no longer cover the policy-mandated cash floor and the treasury becomes a forced seller.
A is allocation, B monthly burn, R required runway in months, F floor multiple. Paths are sampled from the empirical distribution of historical BTC drawdowns. The policy itself creates forced selling, not the price.