S&P Assigns Junk B- Rating to Saylor’s Bitcoin-Heavy Strategy

S&P Global Ratings assigned a "B-" junk credit rating to Strategy Inc., formerly MicroStrategy, due to its heavy concentration in Bitcoin, limited business diversification, and weak dollar liquidity. Strategy holds approximately 640,808 Bitcoins valued at about $70-$74 billion, making it the largest Bitcoin treasury company, but this creates a significant currency mismatch since its debt and preferred stock obligations are denominated in U.S. dollars. The company’s adjusted capital position is significantly negative because S&P deducts volatile Bitcoin assets from equity in its risk assessments, leading to a structurally weak capital base. Despite these risks, S&P cited Strategy's strong access to capital markets and prudent debt maturity management as reasons for the stable outlook. The firm's core software business remains marginally profitable but contributes little to cash flow, while most earnings come from unrealized Bitcoin gains. Overall, Strategy's credit profile is heavily influenced by Bitcoin market volatility and regulatory uncertainties, posing liquidity risks if Bitcoin prices decline sharply.