Stack Runway
← Learning Center

What does a modeled Bitcoin liquidation price mean?

Work backward from a chosen LTV threshold, then separate the model from a real lender event.

A chosen LTV sets the modeled threshold price

For fixed debt and pledged BTC, a threshold price is debt divided by pledged BTC and the chosen loan-to-value (LTV) expressed as a decimal. With $30,000 debt, one pledged BTC, and an illustrative 80% threshold, the modeled price is $37,500.

The 80% figure is an example assumption. It is not a default recommendation or a statement about any lender's terms.

A warning and a liquidation threshold answer different questions

The same $30,000 debt reaches an illustrative 70% warning threshold at about $42,857.14. It reaches 80% at $37,500. These are separate reference points in the model; neither predicts a notice, sale time, or actual sale price.

Debt and collateral can move the threshold

At the same 80% threshold, $40,000 debt against one BTC gives a modeled price of $50,000. Keeping $30,000 debt but pledging 1.25 BTC gives $30,000. Interest, new draws, repayments, and collateral changes can therefore alter the result even before you change the BTC-price assumption.

Read the actual agreement beside the model

Check the lender's valuation method, threshold definitions, notice process, fees, and sale rules. The illustration cannot establish those terms. In Floor Stress, compare your chosen thresholds with the modeled debt and collateral for the selected year.

Review how LTV works, compare price declines, or explore additional collateral.

When would this loan reach 80% LTV?

Assume you owe $30,000, have 1 BTC pledged, and use 80% LTV as an example liquidation threshold.

BTC price at that threshold $37,500 per BTC

Why $37,500?

At that price, your 1 pledged BTC is worth $37,500. The $30,000 you owe is 80% of $37,500. That is where this example reaches its chosen threshold.

It does not mean your lender will sell at exactly $37,500. Use the threshold and valuation rules in your actual loan agreement.

Change one assumption at a time

  • More debt: with $40,000 owed and the same 1 pledged BTC, the 80% threshold is reached at $50,000 per BTC.
  • More collateral: with the original $30,000 debt but 1.25 BTC pledged, the 80% threshold is reached at $30,000 per BTC.

All three examples use the same assumed 80% threshold. More debt brings it to a higher BTC price; more pledged BTC moves it to a lower price.

Open Floor Stress →

This is a worked example. Opening the planner does not transfer these assumptions.