Year-by-year projection
Effective LTV over time — below the margin line = safe
If Bitcoin outpaces your loan's cost, this line trends DOWN and the loan is sustainable forever. If it climbs to the red margin-call line, you'd be force-sold.
Debt vs collateral value
Your loan balance against the value of your allocated Bitcoin. The wider the gap, the safer you are.
Compare all growth models — see how each model's CAGR slope differs
Models 1–4 are CAGR-based (warm lines); models 5–7 are Power-Law-based (cool lines). Some start with a higher growth rate but decay faster — the chart makes those slope differences easy to see.
| Year | Model 1 | Model 2 | Model 3 | Model 4 | Model 5 | Model 6 | Model 7 |
|---|
Loans, LTV & margin calls — how it works & the risks — read this before borrowing
The "forever loan" idea
You borrow dollars against your Bitcoin instead of selling it. You spend the borrowed cash, and you never sell — so you never trigger a taxable event and you keep all your Bitcoin's future upside. Each year you can refinance: roll the old loan (plus its interest) into a new, larger one. This works "forever" only if Bitcoin's growth outpaces your loan's interest. When it does, your collateral grows faster than your debt, your LTV drifts down, and you can keep borrowing safely. When it doesn't, your LTV creeps up until you're margin-called — the death spiral.
What is LTV?
Loan-to-Value = loan balance ÷ collateral value. Borrow $30,000 against $100,000 of Bitcoin and your LTV is 30%. As Bitcoin's price rises, the same loan is a smaller % of a bigger collateral, so LTV falls. As price falls (or your debt grows), LTV rises. CTP (Collateral-to-Principal) is just the inverse — 30% LTV = 333% CTP.
What is a margin call?
Lenders set a maximum LTV (commonly 66.7%, i.e. CTP 1.5×). If Bitcoin falls far enough that your LTV crosses that line, the lender issues a margin call: post more collateral immediately, or they sell your Bitcoin to pay down the loan — locking in a loss at the worst possible time. The lower your starting LTV, the bigger the price crash you can survive before that happens:
| Loan to Value (LTV) |
Collateral to Principal (CTP) |
% Bitcoin drop survivable before margin call | ||
|---|---|---|---|---|
| 150% CTP | 135% CTP | 110% CTP | ||
| 66.7% LTV | 74.1% LTV | 90.9% LTV | ||
| 90% | 111% | 1.00% | ||
| 85% | 118% | 6.50% | ||
| 80% | 125% | 12.00% | ||
| 75% | 133% | 17.50% | ||
| 70% | 143% | 5.50% | 23.00% | |
| 65% | 154% | 2.50% | 12.25% | 28.50% |
| 60% | 167% | 10.00% | 19.00% | 34.00% |
| 55% | 182% | 17.50% | 25.75% | 39.50% |
| 50% | 200% | 25.00% | 32.50% | 45.00% |
| 45% | 222% | 32.50% | 39.25% | 50.50% |
| 40% | 250% | 40.00% | 46.00% | 56.00% |
| 35% | 286% | 47.50% | 52.75% | 61.50% |
| 30% | 333% | 55.00% | 59.50% | 67.00% |
| 25% | 400% | 62.50% | 66.25% | 72.50% |
| 20% | 500% | 70.00% | 73.00% | 78.00% |
| 15% | 667% | 77.50% | 79.75% | 83.50% |
| 10% | 1000% | 85.00% | 86.50% | 89.00% |
| 5% | 2000% | 92.50% | 93.25% | 94.50% |
Read it as: at 30% LTV with a 66.7%-LTV (150% CTP) lender, Bitcoin can fall 55% before you're margin-called. At 60% LTV you only get a 10% cushion. Low LTV buys survival.
Post the minimum — keep the rest in self-custody
Only the collateral you post to the lender is exposed to counterparty risk. So the smart structure is: post just enough to satisfy the lender, and hold the rest of your allocated Bitcoin as a self-custody reserve that you add only if a price drop demands it. Think of that reserve as part of the loan keeping your LTV low — it just isn't sitting at the counterparty. Example: a lender allows a 50% LTV (2× collateral). Post exactly 2×, keep another ~1.3× in reserve, and your effective LTV is ~30% even though your posted LTV is 50%. If Bitcoin dips, you move reserve in; otherwise it never touches the lender.
The real risk: counterparty failure
FTX, BlockFi, Celsius and others went bankrupt and customers lost coins they'd handed over. A Bitcoin-backed loan means giving up custody of the posted collateral — if the lender fails, that collateral can be gone regardless of your LTV. That's why you should only ever put a small slice of your total stack at risk. If you allocate 20% and the worst happens, you lose 20% of your Bitcoin — painful, not fatal. Allocate 100% and a single counterparty failure wipes you out. This calculator makes that exposure explicit.
Is now a good time? (timing grade)
Opening a loan near a cycle top is dangerous: a normal 60–80% Bitcoin drawdown would blow through almost any LTV. We grade timing by comparing today's price to Bitcoin's True Market Mean (a fair-value line price spends about half its time above and below). Well above the mean = Risky (use a low LTV or wait for a dip); at or below = Good.
Why not start from today's exact price?
For the growth projection we anchor to an average, not a single volatile day. CAGR models (1–4) start from the True Market Mean (currently …); Power-Law models (5–7) start from a modeled end-of-… price (Model 5 = Middle …, Model 6 = Median …, Model 7 = Bottom …). The loan itself opens at the start price you choose above — today's spot by default. See the True Market Mean chart and the Power Law chart for background.