Bitcoin drawdown calculator

A drawdown starts at a high-water mark and ends when that mark is reclaimed. In between, the drawdown at any moment is (peak − current) ÷ peak, and the episode's headline number is the worst value that expression ever reached. The maximum drawdown is simply the deepest of those episodes across the whole history.

Two details are easy to miss. First, the peak is a running peak: once a price is printed it becomes the reference for everything after it, so you are always measured against your best moment, not your entry. Second, the clock does not stop at the bottom. Picture a 75% fall that takes eight months to bottom and another two and a half years to recover. That is three years of being worse off than you once were. The duration is usually what breaks people's conviction, not the percentage itself.

Drawdown is the honest counterpart to a headline return. A backtest that shows a large gain while quietly passing through an 80% decline is describing a strategy most people would have abandoned somewhere in the middle. That is why the main DCA calculator puts max drawdown next to its return figures rather than tucking it away. DCA is dollar-cost averaging: buying a fixed amount on a fixed schedule instead of all at once.

The numbers above are price drawdowns, and a portfolio drawdown is not the same thing. A portfolio that is still receiving contributions gains value from new money at the same time it loses value to the price. Somebody who bought once at the top lives the price drawdown exactly. Somebody buying every week lives something shallower, and buys the whole way down.

Read that gap carefully, because it is easy to draw the wrong conclusion from it. DCA did not make the asset safer. The coins already in the stack fell by the full price percentage. What changed is that the portfolio was small when the fall began and kept being topped up at lower prices, which flatters the measured peak-to-trough number. Run the same comparison on someone who stopped contributing at the top and the two figures converge.

There is a second, less comfortable implication. The reason a DCA drawdown looks mild early on is that there is not much money in it yet. As the stack grows, each future contribution is a smaller fraction of the total, so a DCA portfolio's drawdown behavior drifts toward the price's own behavior over time. The longer you have been stacking, the more the history above describes your experience rather than the softened version.

Finally: none of these figures bound the future. Bitcoin is roughly fifteen years old and has never been tested through a full global credit cycle as an institutional holding. The deepest fall in the table is just the worst thing that has happened to it so far. A sample maximum is not a limit. Plan for worse than the worst row.

In retirement planning, “drawdown” is the withdrawal phase: you stop adding and start selling. For a volatile asset this is a genuinely different problem from accumulation, because selling a fixed amount of money every month means selling more coins when the price is low. A decline early in the withdrawal phase permanently removes coins that would otherwise have participated in any later recovery.

The planner below spends a stack down month by month. Set the monthly withdrawal, an assumed growth rate, how fast withdrawals rise with inflation, and a floor of coins you refuse to sell. It reports how long the stack lasts, the same answer under a bear and a bull path, and the largest monthly withdrawal that survives 30 years.

How to read the result. The number it gives you is an upper bound, not a plan. The model compounds the price smoothly at whatever rate you type, which is the one thing Bitcoin has never done. A real path with the same average return but a deep decline in the first few years drains the stack far faster, because those early withdrawals sell many more coins. That is sequence-of-returns risk, and a constant-growth model has none of it by construction.

What it leaves out. No capital gains tax, no exchange or withdrawal fees, no spread, and no lump-sum expenses. It also assumes you keep selling on schedule through a 70% decline, which is exactly the moment most people stop. Treat the bear column as the interesting one.

The methodology page lists every data source and every known limitation behind these numbers.