Saylor’s Strategy Earns Historic Credit Rating, a First for Bitcoin Treasury Companies

S&P Global Gives Strategy a B- Rating, Marking First Credit Grade for a Bitcoin Treasury Firm

S&P Global Ratings has assigned a B- credit rating to Michael Saylor’s bitcoin-holding firm, Strategy (MSTR), making it the first-ever Bitcoin treasury company to be rated by a major credit agency.

The B- grade places Strategy firmly in speculative territory — or “junk” status — signaling elevated financial risk despite its substantial market capitalization and access to capital markets. S&P said the company’s near-total dependence on bitcoin as its primary asset adds volatility and limits financial flexibility.

Under S&P’s scale, a B rating reflects “speculative credit quality with increased default risk.” A B- suggests slightly higher vulnerability but remains above the lowest categories.

Once an enterprise software business, Strategy has effectively become a publicly traded bitcoin holding vehicle, reinvesting nearly all excess cash into BTC and financing purchases through convertible debt, preferred shares, and new equity.

Executive Chairman Michael Saylor said the rating establishes a precedent for the growing class of Bitcoin treasury companies. “This marks the first time a bitcoin-based firm has been formally rated by a major credit agency,” Saylor noted. Industry leaders such as KindlyMD CEO David Bailey added that institutional interest in such firms “is about to explode.”

S&P Flags Liquidity Risks and Balance Sheet Imbalance

As of mid-2025, Strategy held around $70 billion in bitcoin against roughly $15 billion in debt and preferred equity. Despite this asset base, S&P cautioned that the company’s cash reserves remain thin and that its software business contributes little to overall earnings. Strategy reported negative $37 million in operating cash flow between January and June 2025.

S&P highlighted a “currency mismatch” between the firm’s assets — mostly denominated in bitcoin — and its dollar-based debt and dividend obligations. This could force Strategy to liquidate bitcoin holdings during market downturns if capital access weakens.

The agency also excluded bitcoin from its equity calculations, citing volatility and market correlation risks. This accounting treatment leaves Strategy with “negative total adjusted capital” on paper despite its large digital asset holdings.

Preferred stock dividends represent another potential strain, with over $640 million owed annually across four classes of preferred equity. Strategy can defer these payments, though doing so would grant preferred shareholders board rights and trigger higher accrued interest. The company plans to fund these dividends through new equity issuance rather than BTC sales.

Stable Outlook, but Bitcoin Remains Key Risk

Despite its warnings, S&P assigned a stable outlook, pointing to Strategy’s track record in managing debt maturities and maintaining capital market access. The next major maturity date isn’t until 2028, offering the firm near-term breathing room — assuming bitcoin prices remain resilient.

The agency said it could downgrade the company if access to funding tightens or repayment risk increases, while any upgrade would depend on stronger dollar liquidity and reduced reliance on convertible financing.

“S&P’s outlook essentially ties Strategy’s credit health directly to bitcoin’s price trajectory,” analysts noted.

Shares of MSTR gained nearly 3% on Monday, following bitcoin’s weekend rally to $115,500.