Strategy Reduces Leverage Risk With Cash Holdings Near Convertible Debt Value

Strategy has brought its net leverage to almost zero after building $6.69 billion in dollar liquidity, giving the Bitcoin treasury firm a larger cushion against its debt obligations.

The company calculates net leverage by taking its roughly $6.75 billion debt balance, subtracting its dollar assets and dividing the result by the value of its Bitcoin holdings. Strategy’s BTC reserve is currently worth about $66 billion.

The company has spent the past several months raising funds to strengthen its U.S. dollar position. Its main reserve has reached approximately $5.1 billion, enough to cover nearly four years of preferred-stock dividends, which require around $1.7 billion annually.

Strategy also maintains a separate $1.59 billion cash pool that provides additional flexibility for corporate expenses and other financial needs.

Executive Chairman Michael Saylor said the company’s dollar holdings support its digital credit framework and can be deployed for Bitcoin acquisitions, preferred dividends, interest payments, stock repurchases, convertible debt repayments and further additions to the reserve.

STRC Gains but Remains Below Par

Strategy’s variable-rate perpetual preferred stock, STRC, has risen more than 35% from its June low and is currently trading near $97.23. That remains below its $100 par value.

The recovery has been supported by Bitcoin’s advance toward $80,000 and Strategy’s continued purchases of STRC shares at prices below par.

Strategy’s capital structure differs from rival Bitcoin treasury firm Strive Asset Management, which has no debt after clearing its borrowings earlier this year. That distinction matters because creditors have a senior claim over preferred shareholders.

Strive’s SATA perpetual preferred stock has recovered to the $100 par level, allowing the company to sell additional shares through its at-the-market program last week.

Strategy previously reduced its debt load in May by repurchasing $1.5 billion of convertible notes scheduled to mature in 2029. Additional debt repayments could further strengthen STRC’s position relative to other claims on the company.

For now, Strategy’s sizable cash reserves, continued STRC buybacks and Bitcoin’s recovery could provide further support for the preferred stock and help it close the gap toward its $100 par value.