S&P Global Ratings has assigned a 'B-' issuer credit rating to Strategy (formerly MicroStrategy), a bitcoin treasury company, marking the first time a major credit rating agency has evaluated such an entity. The outlook is stable.
S&P stated that 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. However, operating cash flow during the period was negative $37 million, indicating that its small AI-powered analytics business is roughly breakeven.
Strategy effectively operates as a bitcoin treasury company, raising capital through equity and debt issuances to purchase and hold bitcoin. Its securities provide investors varying exposure to bitcoin across its capital structure. Just today, founder 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. As of June 30, 2025, Strategy held bitcoin valued at roughly $70 billion, against $8 billion in convertible debt (much of it maturing from 2028 onward), and annual preferred dividends totaling about $640 million. The company plans to fund these dividends through additional stock and preferred equity issuance.
A First for the Industry
This S&P rating is the first-ever rating of a Bitcoin Treasury Company by a major credit rating agency. S&P deducts bitcoin assets from equity in its calculation, resulting in a significantly negative risk-adjusted capital ratio as of June 30, 2025. This highlights a key risk: a currency mismatch between Strategy's bitcoin-denominated assets and its dollar-denominated obligations (interest, debt principal, and preferred dividends). The agency also pointed to cybersecurity risks given the company's reliance on custodians to safeguard its bitcoin.
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 forced bitcoin sales “at severely depressed prices.” The rating could be downgraded if market access 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.
Michael Saylor'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.