S&P Global Ratings has given Strategy Inc. (NASDAQ: MSTR), the company formerly known as MicroStrategy, a B– rating. This is the first time a major credit rating agency has rated a bitcoin-focused treasury company.
The S&P credit rating cites a stable outlook and reflects both the company’s growing influence in the digital asset world and the risks of its unconventional balance sheet.
S&P listed “high bitcoin concentration, narrow business focus, weak risk-adjusted capitalization, and low U.S. dollar liquidity” as major weaknesses.
Despite the negative rating, the stock price went up on the day of the announcement to as high as $300 before slipping back down to $287 the day after.
Strategy is not your average company. Once a business intelligence software provider, it has become a bitcoin treasury company. Instead of using its profits to fund operations, the company raises money through stock and debt offerings to buy more bitcoin.
According to company disclosures, Strategy now holds around 640,000 BTC, valued at roughly $73 billion, making it the largest public holder of bitcoin in the world. Its software division contributes only a small portion of total revenue and is roughly breakeven.
S&P’s decision to rate the company acknowledges Strategy’s growing role in bridging traditional finance and Bitcoin. Saylor called it a milestone, saying his company is the first digital asset treasury (DAT) to get rated by a major credit agency.
A B– rating is considered speculative or what analysts call “junk grade”. It means the company can meet its debt obligations for now, but faces significant risk if market conditions deteriorate.
In simpler words, it basically means the issuer is highly vulnerable to adverse conditions. The company’s financial stability is stable now but fragile, and if the economy worsens or financing tightens, default risk rises sharply.
S&P said the rating reflects Strategy’s heavy reliance on bitcoin’s value and its limited U.S. dollar liquidity. The company’s debt and preferred dividend obligations are in dollars but its assets are mostly in bitcoin. This is new to S&P, and creates what it called an inherent currency mismatch.
“Debt maturities, interest on the company’s debt, and dividends on its preferred securities are all due in dollars, while Strategy holds mostly bitcoin,” the agency said.
As of mid-2025, the firm had $8.1 billion in pre-tax earnings, almost all from unrealized gains in its bitcoin holdings. But its operating cash flow was negative $37 million, so its assets don’t generate steady income.
Related: Strategy Posts $3.9 Billion Bitcoin Gain in Q3 2025
S&P treats bitcoin as a highly volatile asset so it subtracts bitcoin holdings from equity when calculating capital strength. That’s the reason analysts are divided on this rating.
Some say Strategy’s core competitive advantage is its massive bitcoin treasury. Excluding BTC from capital calculations underestimates the company’s actual net worth and financial flexibility.
In a bullish bitcoin market, these holdings could easily cover debt or fund operations.
Others believe this S&P credit rating report has raised concerns about the strain that the company’s convertible debt could be putting on its liquidity—about $8 billion. Around $5 billion of that is currently out of the money and won’t mature till 2028.
Now Saylor’s company got a lot of bitcoin stashed away compared to how much it owes out, but S&P is warning that if the price of bitcoin tanks, then the company might have to offload some of its coins “at severely depressed prices,” or restructure its debt.
On top of that, Strategy owes around $640 million a year in preferred stock dividends. It plans to keep funding these by issuing more shares.
Strategy can delay paying out these dividends but if it does, it could wind up with the preferred shareholders having more say on the board or getting a better deal on dividends, something it really wants to avoid.
Despite S&P’s concerns, analysts and investors appear unfazed. TD Cowen analysts reaffirmed their Buy rating on Strategy’s stock, setting a $620 price target, which implies more than 100% upside from recent prices.
They expect Strategy to hold nearly 900,000 BTC by 2027, representing over 4% of the total supply of bitcoin. They believe growing institutional adoption and a friendlier regulatory environment could keep boosting the company’s value.
Matthew Sigel of VanEck summed up the market’s view, saying, “The company is able to service debt for now, but vulnerable to shocks.”
Michael Saylor, who founded MicroStrategy in 1989, has become one of bitcoin’s most outspoken advocates. His long-term goal, he said, is to build a trillion-dollar bitcoin balance sheet and create a new kind of global credit system based on bitcoin.
Saylor envisions corporations, banks, and even governments holding bitcoin as a reserve asset, allowing financial products—from bonds to insurance—to be backed by bitcoin rather than fiat currency.
To supporters, Strategy is paving the way for this transformation. To skeptics, it’s a highly leveraged bet on a volatile asset.
