S&P Rates Strategy Inc. B- Over Bitcoin Risks and Debt

Highlights:

• S&P rated Strategy Inc. B-minus due to heavy Bitcoin exposure and risks.
• The firm holds 640,808 Bitcoins worth $74 billion, but faces $8 billion in debt.
• Despite junk status, S&P kept a stable outlook as the Strategy keeps strong market access.

S&P Global Ratings has rated Strategy Inc., formerly MicroStrategy, at B-minus with a stable outlook. This score places the Bitcoin-holding firm in the junk bond range. The agency said the company’s heavy focus on Bitcoin has increased risk and limited its other business options. Analysts said most of Strategy’s work now depends on Bitcoin. S&P warned that this approach adds big volatility and liquidity problems. 

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Under Michael Saylor’s leadership, Strategy Inc. has shifted over the past five years from a software company to a Bitcoin-focused firm. The firm holds 640,808 Bitcoins, valued at around $74 billion, which makes it the biggest Bitcoin-holding company in the world.  The company has a long Bitcoin position but a short U.S. dollar position, which could cause trouble if Bitcoin prices fall hard. 

According to Matthew Sigel, head of digital assets research at VanEck, the company can service its debt for now, yet stays exposed to potential shocks.

🚨Strategy Inc Assigned 'B-' Issuer Credit Rating; Outlook Stable at S&P

That’s high-yield territory. Able to service debt for now, but vulnerable to shocks.

S&P data: B issuers carry ~15% 5-yr default risk. https://t.co/ingZu6DRmH pic.twitter.com/RrHOWYmzVG

— matthew sigel, recovering CFA (@matthew_sigel) October 27, 2025

Debt and Liquidity Concerns

S&P said most of Strategy’s debt and preferred equity are in U.S. dollars. That means the company might need to sell Bitcoin at low prices if markets turn weak. It owes around $8 billion in convertible debt, with $5 billion due between 2028 and 2031, and pays over $640 million each year in preferred dividends. The agency said there is no major debt due in the next 12 months, calling that a short-term relief. But the big risk is still there if Bitcoin prices drop sharply. The company could face pressure to sell coins to cover its obligations. 

Market Access Keeps Strategy Afloat

Even with the junk rating, S&P kept a stable outlook. It said Strategy still has strong access to capital markets. The company’s market value is near $80 billion, and it has raised around $15 billion through debt and preferred shares.

S&P expects the firm to keep raising money this way instead of selling Bitcoin. The main software business remains small and just breaks even. In the first half of 2025, Strategy showed a negative $37 million in operating cash flow, and most of its $8 billion pre-tax income came from Bitcoin price gains, not actual earnings.

Saylor’s Response and Next Steps

On X, cofounder and chairman Michael Saylor called the rating “the first-ever rating of a Bitcoin treasury company.” The comment shows pride in the milestone but doesn’t change market doubts about its financial strength. Despite warnings from critics like Peter Schiff, Strategy is still buying Bitcoin. The firm recently made another purchase worth $43.4 million. 

S&P Global Ratings has assigned Strategy Inc a 'B-' Issuer Credit Rating (Outlook Stable) — the first-ever rating of a Bitcoin Treasury Company by a major credit rating agency. https://t.co/WLMkFqkkCb

— Michael Saylor (@saylor) October 27, 2025

Earlier this year, Strategy changed its name from MicroStrategy to highlight its focus on Bitcoin. The company will release its third-quarter earnings on October 30, and investors will watch to see if it can manage cash flow and debt while staying tied so closely to Bitcoin.

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