S&P Downgrades Strategy (formerly MicroStrategy) to Junk Rating — Highlights Crypto-Linked Risks

According to PANews, S&P Global Ratings has assigned a B- “junk” credit rating to Strategy (formerly MicroStrategy), pointing to the company’s heavy exposure to Bitcoin, limited diversification, and tight liquidity.

The rating — six notches below investment grade — reflects what S&P described as “heightened risk tied to crypto concentration,” even as it acknowledged Strategy’s careful management of convertible bonds.

Key Details:

Strategy currently holds $74 billion worth of Bitcoin, primarily financed through debt and equity issuance.

The company has nearly $15 billion in outstanding convertible bonds and preferred stock, including $5 billion set to mature beginning in 2028.

It also owes around $640 million annually in preferred stock dividends.

S&P warned that Bitcoin price volatility could directly pressure the company’s ability to manage its debt.

Why It Matters:

This marks the first-ever credit rating for a Bitcoin-heavy company, as noted by co-founder Michael Saylor on X. While Strategy remains one of the largest corporate Bitcoin holders globally, the report highlights the growing tension between crypto enthusiasm and traditional credit risk models.

My Take:

This downgrade doesn’t necessarily spell disaster — it’s a wake-up call for institutions mixing traditional finance with Bitcoin-backed strategies. Strategy’s bet on Bitcoin remains bold, but the rating underscores one truth: in volatile markets, liquidity is king.