S&P Global Ratings assigned a ‘B-’ issuer credit rating to bitcoin-juggernaut Strategy, reflecting the company’s heavy concentration in bitcoin and limited dollar liquidity. The outlook is stable.
S&P said the rating reflects Strategy’s “high bitcoin concentration, narrow business focus, weak risk-adjusted capitalization, and low U.S. dollar liquidity.” The company reported $8.1 billion in pre-tax earnings in the first half of 2025, almost entirely from appreciation in the value of its bitcoin holdings.
The firm said in their release that while Strategy’s balance sheet is dominated by bitcoin, its management has prudently staggered debt maturities and maintained flexibility by financing primarily with equity.
In other words, this rating means Strategy can meet debt obligations for now but faces significant default risk if market conditions worsen.
Strategy — now effectively a bitcoin treasury company — raises capital through equity and debt issuances to purchase and hold bitcoin. Its securities give investors varying exposure to bitcoin across its capital structure.
Just today, founder and former CEO Michael Saylor announced a purchase of 390 BTC between October 20 and October 26, spending approximately $43.4 million at an average price of $111,053 per Bitcoin. The firm still operates a small AI-powered analytics business, though it remains roughly breakeven.
A Strategy first
This S&P rating is the first-ever rating of a Bitcoin Treasury Company by a major credit rating agency.
According to S&P, Strategy’s risk-adjusted capital ratio was significantly negative as of June 30, 2025, because the agency deducts bitcoin assets from equity in its calculation.
Strategy reported $8.1 billion in pre-tax earnings in the first half of 2025. Operating cash flow during the period was negative $37 million.
The agency cited several key risks, including a currency mismatch between Strategy’s bitcoin-denominated assets and dollar-denominated obligations such as interest, debt principal, and preferred dividends.
S&P also pointed to cybersecurity risks given the company’s reliance on custodians to safeguard its bitcoin.
Strategy holds bitcoin valued at roughly $70 billion, against $8 billion in convertible debt, much of which matures beginning in 2028. Annual preferred dividends total about $640 million, which the company plans to fund through additional stock and preferred equity issuance.
While Strategy’s access to capital markets remains a core strength, S&P warned that a sharp decline in bitcoin prices or loss of investor confidence could impede its ability to refinance debt or pay dividends, potentially leading to bitcoin sales “at severely depressed prices.”
S&P said the rating could be downgraded if access to markets weakens or debt management risks rise. An upgrade is unlikely unless the company improves its U.S. dollar liquidity or reduces reliance on convertible debt.
Strategy’s trillion-dollar endgame
Earlier this year, Michael Saylor laid out an ambitious plan to reshape global finance through Bitcoin.
In an interview with Bitcoin Magazine, Saylor described an “endgame” in which Strategy accumulates a trillion-dollar bitcoin balance sheet, growing 20–30% annually, and uses it as the foundation for a new global credit system.
At the core of his vision is scale: with enough BTC on corporate balance sheets, the long-term appreciation of Bitcoin — historically around 21% annually — would supercharge the capital base.
On top of that, Saylor sees an opportunity to issue bitcoin-backed credit at yields significantly higher than traditional fiat-based debt, potentially two to four percentage points above corporate or sovereign rates.
He argued that over-collateralization could make this system safer than even AAA-rated debt, while simultaneously fueling broader financial growth.
Saylor’s vision extends beyond credit markets. As Bitcoin becomes embedded in corporations, banks, insurers, and sovereign wealth funds, public equity indexes could gradually become indirect bitcoin vehicles.
This, he says, would benefit equity markets and corporate balance sheets while introducing higher yields and greater transparency into financial products.
The implications are broad: savings accounts could yield 8–10% instead of near-zero, money market funds could be denominated in bitcoin, and insurance products could be reimagined around bitcoin collateral.
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