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 BTC 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 BTC concentration, narrow business focus, fragile risk-adjusted capitalization, and low U.S. dollar liquidity as fragilenesses,” the agency said. The assessment reflects the company’s reliance on BTC as its core asset and limited operating diversification.
The rating makes Strategy the first BTC-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 dollars while its reserves are mostly tied up in BTC and funding its enterprise software operations, which are roughly breakeven in cash flow.
S&P warned that if BTC were to experience a sharp correction, the company’s liquidity position could tighten rapidly. The agency said convertible debt could come due during a period of market stress, potentially forcing Strategy to liquidate BTC holdings at depressed prices. The company’s rating could fall further if its fragileens 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 fragile 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 , 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 later than the S&P announcement, suggesting investors were not deterred by the speculative label.
The company’s BTC-centric model has long divided analysts. Supporters view it as a high-beta proxy for BTC’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.
