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Perpetual Preferred Equity Against Bitcoin: Required Coverage Across Observed Drawdowns

Author

Listed:
  • Fairbanks, Jackson

Abstract

Perpetual preferred equity issued against a Bitcoin reserve produces a forward-coverage problem. The measure of forward solvency is the Bitcoin Coverage Ratio (BCR): BTC reserve value over annual dividend obligation, in years of forward coverage. BCR collapses the preferred-to-reserve ratio and dividend rate into a single coverage statistic. Primary failure occurs at BCR

Suggested Citation

  • Fairbanks, Jackson, 2026. "Perpetual Preferred Equity Against Bitcoin: Required Coverage Across Observed Drawdowns," MPRA Paper 130390, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:130390
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    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation

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