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S&P Global Ratings has given Strategy (MSTR) a B- credit rating, placing the company firmly in the non-investment grade or “junk bond” category. The rating reflects S&P’s view that Strategy’s business model—centered almost entirely on holding bitcoin (BTC)—poses significant financial risks, despite the company’s large market capitalization and access to capital markets.
According to S&P, a B rating signals speculative credit quality with a heightened default risk. A B- indicates slightly higher risk, while still above CCC territory, which denotes very high default risk. Led by Executive Chairman Michael Saylor, Strategy has evolved from a traditional software firm into a bitcoin treasury company, using nearly all excess cash to buy bitcoin and financing operations through convertible debt, preferred stock, and equity sales.
As of mid-2025, Strategy held roughly $70 billion in bitcoin against $15 billion in outstanding debt and preferred equity. However, S&P emphasized that this strength is misleading since the company holds minimal cash and generates little operational income. Between January and June 2025, it reported a negative $37 million in operating cash flow.
S&P also noted a currency mismatch—bitcoin assets versus dollar-denominated debts and dividends—creating potential liquidity stress if bitcoin prices drop. The firm’s negative adjusted capital stems from S&P’s exclusion of bitcoin from equity due to volatility. Strategy also faces over $640 million in annual preferred dividends, which it plans to fund through new equity rather than bitcoin sales.
Despite these challenges, S&P maintained a stable outlook, citing manageable debt maturities through 2028 and strong capital access. Shares of MSTR rose nearly 3% on Monday, tracking bitcoin’s weekend rally to $115,500. Still, S&P warned that unless Strategy strengthens its dollar liquidity, upgrades are unlikely, as its fortunes remain tightly tied to bitcoin’s volatility.
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