S&P Gives Michael Saylor’s Strategy a ‘B-’ Junk Rating

S&P Flags Liquidity and Concentration Risks

S&P Global Ratings has given Michael Saylor’s Strategy a B- credit rating, placing the Bitcoin treasury company in the speculative, non-investment-grade category. The outlook remains stable, S&P said in a note published Monday.

“We view Strategy’s high bitcoin concentration, narrow business focus, weak risk-adjusted capitalization, and low U.S. dollar liquidity as weaknesses,” the agency said. The assessment reflects the company’s reliance on Bitcoin as its core asset and limited operating diversification.

The rating makes Strategy the first Bitcoin-treasury-focused company to receive an S&P Global assessment, setting a reference point for how traditional credit agencies measure the risk of businesses that center on digital assets.

Investor Takeaway

Debt and Currency Exposure

Strategy holds 640,808 BTC, accumulated primarily through a mix of equity and debt financing. S&P said the stable outlook assumes the company will manage its convertible debt maturities and preferred stock dividends prudently, possibly with new debt issuance. The agency noted an “inherent currency mismatch,” as Strategy’s debt is denominated in U.S. dollars while its reserves are mostly tied up in Bitcoin and funding its enterprise software operations, which are roughly breakeven in cash flow.

S&P warned that if Bitcoin were to experience a sharp correction, the company’s liquidity position could tighten quickly. The agency said convertible debt could come due during a period of market stress, potentially forcing Strategy to liquidate Bitcoin holdings at depressed prices. The company’s rating could fall further if its access to capital markets weakens or its ability to refinance debt deteriorates.

Comparison With Sky Protocol

Strategy’s B-minus rating matches that of Sky Protocol — formerly MakerDAO — which S&P rated in August. Both firms were classified as speculative-grade due to limited capitalization and concentrated exposure. In Sky’s case, the agency cited high depositor concentration, centralized governance, and weak capital buffers as key vulnerabilities.

To escape junk status, Strategy would need six rating upgrades to reach BBB-minus, the lowest investment-grade level. Analysts said that while an upgrade in the next 12 months is unlikely, S&P could reconsider if Strategy increases its U.S. dollar liquidity, reduces reliance on convertible debt, and continues to secure access to credit markets even during downturns.

Stock Market Reaction and Outlook

Strategy’s stock, one of the Nasdaq’s top performers in 2024 with a 430% rally, has fallen 13% so far in 2025, according to Google Finance. Shares rose 2.27% on Monday after the S&P announcement, suggesting investors were not deterred by the speculative label.

The company’s Bitcoin-centric model has long divided analysts. Supporters view it as a high-beta proxy for Bitcoin’s price, while critics argue that the strategy magnifies financial risk. For now, S&P’s decision places Strategy alongside other highly leveraged, crypto-exposed entities operating in a volatile market with limited dollar liquidity buffers.

Investor Takeaway