Introduction
In a groundbreaking move, S&P Global Ratings has bestowed a B- credit rating on Michael Saylor’s Strategy Inc., marking the first evaluation for a company specializing in Bitcoin treasury management. This rating positions Strategy Inc., previously known as MicroStrategy, a substantial six levels below the threshold for investment-grade status. Published by Bloomberg on October 27, the report underscores the company’s heavy reliance on Bitcoin (BTC) along with concerns regarding its liquidity and risk-adjusted capitalization.
Company Transition and Financial Overview
For the past five years, Strategy Inc. has transitioned from a conventional enterprise software provider to a firm heavily invested in Bitcoin, amassing an impressive 640,808 BTC valued at approximately $74 billion, making it the largest corporate Bitcoin holder worldwide. However, S&P highlights that this exposure renders the company particularly susceptible to fluctuations within the cryptocurrency market.
Furthermore, Strategy’s legacy software arm is struggling financially, contributing little to safeguard against significant declines in Bitcoin prices. In the first half of 2025, the company reported a staggering $37 million in negative operating cash flow while maintaining negligible cash reserves, as its treasury is largely composed of Bitcoin.
Liquidity Challenges and Financial Obligations
The rating agency also pointed out serious liquidity challenges and currency mismatch risks faced by Strategy. The firm carries around $8 billion in USD-denominated convertible debt due between 2028 and 2031, with its annual preferred stock dividends surpassing $640 million. S&P cautions that a sustained drop in Bitcoin prices could severely challenge the company’s ability to meet these financial obligations.
Outlook and Future Prospects
Despite these issues, S&P provided a stable outlook for Strategy, anticipating that the company would navigate its funding requirements through stock offerings and structured debt instruments, similar to methods employed in recent Bitcoin acquisitions, which included a notable purchase of 390 BTC costing $43.4 million.
Industry Impact and Rebranding
Michael Saylor views the rating as a pivotal moment for Bitcoin’s acceptance within the traditional financial landscape. He characterized it as an important step towards the normalization of Bitcoin-focused public companies. Analysts believe this rating could serve as a benchmark for other Bitcoin-centric firms like Metaplanet and Marathon Digital, potentially encouraging them to pursue similar evaluations. While Strategy’s B- rating keeps it within the speculative category, it signifies progress in bridging the gap between digital asset-driven enterprises and conventional capital markets.
Earlier this year, Strategy formally rebranded from MicroStrategy, fully committing to its role as a Bitcoin treasury advocate. The forthcoming third-quarter earnings report, scheduled for release on October 30, will shed further light on how successfully it manages its financial obligations amidst its exposure to the volatile world of cryptocurrencies.
