S&P Global Ratings has assigned a B- issuer credit rating with a stable outlook to Strategy, Michael Saylor’s Bitcoin treasury vehicle, citing significant risks from its high concentration in the volatile cryptocurrency and a mismatch between its U.S. dollar-denominated liabilities and Bitcoin assets.
The speculative-grade rating, issued on October 27, 2025, reflects the company’s exposure to $8 billion in convertible debt and its limited U.S. dollar liquidity. Strategy, which holds 640,808 Bitcoin valued at approximately $74 billion, relies heavily on its crypto assets while facing obligations in fiat currency.
S&P Global highlighted several weaknesses, including Strategy’s singular business focus on Bitcoin, its low liquidity in U.S. dollars, and a risk-adjusted capitalization that the agency deems weak. This structure exposes the firm to potential liquidity pressures if Bitcoin prices decline significantly.
Strategy finances its operations and Bitcoin acquisitions by issuing common shares (MSTR) and various series of preferred stock. While this model has allowed it to amass the largest public Bitcoin treasury, it also introduces specific financial vulnerabilities.
The rating agency noted that the company’s debt maturities, interest payments, and preferred stock dividends are all due in U.S. dollars. This creates a critical tension against its primary asset, Bitcoin, whose value can fluctuate wildly.
Of the total $8 billion in convertible debt, $5 billion is currently “out-of-the-money,” meaning the conversion price into shares has not been reached. These instruments begin to mature in 2028.
S&P Global warned that if this debt matures during a period of severe stress in the Bitcoin market, Strategy could be forced to liquidate its Bitcoin holdings at depressed prices. This scenario would lead to substantial liquidity challenges and potential capital losses for investors.
The agency also cited regulatory and cybersecurity risks inherent in a business model centered on a single, specific crypto asset. Despite these concerns, S&P acknowledged Strategy’s solid access to capital markets and prudent capital structure management.
S&P Global does not anticipate an upgrade in Strategy’s rating over the next 12 months. However, a downgrade could occur if the company faces restricted access to capital markets or struggles to manage its out-of-the-money convertible debt maturities.
Conversely, a long-term improvement in the rating would depend on Strategy increasing its U.S. dollar liquidity, reducing its reliance on convertible debt, and demonstrating consistent access to capital markets even amidst Bitcoin price volatility. The stable outlook indicates that S&P does not expect immediate changes unless the identified risk factors worsen.