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In a groundbreaking development, S&P has assigned a B- junk credit rating to Michael Saylor’s Strategy Inc., marking the first-ever rating for a Bitcoin treasury firm.
Summary
- S&P has designated Strategy with a B- junk rating.
- The rating is based on Bitcoin exposure, low liquidity, and concentrated risk factors.
- This is the inaugural rating for a company focused on Bitcoin treasury management.
S&P Global Ratings has given Strategy Inc., formerly MicroStrategy, a B- credit rating, positioning it six levels below investment grade.
The report, published by Bloomberg on October 27, indicates that the rating is due to Strategy’s heavy reliance on Bitcoin (BTC) and its lack of diversification, coupled with concerns over liquidity and risk-adjusted capitalization.
S&P highlights Bitcoin exposure and liquidity challenges
Under Michael Saylor’s leadership, Strategy Inc. has undergone a transformation from an enterprise software company to one focused on Bitcoin accumulation, now holding 640,808 BTC valued at approximately $74 billion, making it the largest corporate holder of Bitcoin globally.
According to S&P, the company is highly susceptible to market fluctuations due to its substantial Bitcoin exposure. Its primary software business generates minimal revenue, providing little protection against declining cryptocurrency prices. In the first half of 2025, the company reported a negative operating cash flow of $37 million and has limited dollar reserves, with the majority of its treasury invested in BTC.
The agency noted additional risks related to liquidity and currency mismatches. Strategy carries about $8 billion in USD-denominated convertible debt set to mature between 2028 and 2031, and its preferred stock dividends surpass $640 million annually. S&P cautioned that a prolonged downturn in Bitcoin’s price could hinder the company’s ability to meet these financial commitments.
Despite these challenges, S&P has provided a stable outlook, assuming that Strategy will address its financing needs through stock offerings and structured debt sales, strategies it has previously employed to facilitate recent Bitcoin purchases, including a recent acquisition of 390 BTC valued at $43.4 million.
A significant milestone for Bitcoin treasuries
Saylor characterized the rating as a pivotal moment for Bitcoin’s acceptance in traditional finance, emphasizing that it marks the first formal assessment from a major credit agency for a publicly traded Bitcoin-centric firm. He referred to it as a “step toward normalization,” presenting the rating as a recognition rather than a disadvantage.
Industry analysts view this rating as a benchmark for other Bitcoin-heavy businesses like Metaplanet and Marathon Digital, which may pursue similar evaluations. While the B- grade places Strategy in speculative territory, it represents progress in bridging the divide between cryptocurrency-driven business models and conventional capital markets.
This year, Strategy rebranded from MicroStrategy, fully embracing its role as a Bitcoin treasury company. Its upcoming third-quarter earnings report, scheduled for October 30, will provide further insights into how it manages its debt, cash flow, and exposure to the world’s most unpredictable asset.
