S&P Assigns ‘Junk’ B- Rating to Saylor’s Bitcoin Treasury
Key Takeaways
- Strategy has become the first Bitcoin treasury company to get a rating from S&P Global Ratings.
- S&P has given a ‘B-’ rating, which means it is a non-investment-grade and speculative stock.
- While the rating, often mentioned as a “junk” rating, is poor, S&P mentions that the company has room for improvement.
- Despite the low rating, Strategy’s stock is up today, signifying a positive outlook.
S&P Global Ratings, one of the “Big Three” credit rating agencies alongside Moody’s and Fitch Ratings, has assigned an issuer credit rating to Michael Saylor’s Bitcoin accumulation and corporate treasury management company, Strategy (formerly MicroStrategy). It is the first time a major credit rating agency has evaluated a company based on the Bitcoin treasury.
Despite Strategy’s large market capitalization and strong growth, S&P assigned a ‘B-’ rating, which places the company into a non-investment-grade and speculative stock category, often referred to as “junk,” indicating a higher risk investment. However, S&P expects Strategy to improve its rating soon, primarily due to its stable outlook.
Why Did S&P Assign a ‘B-’ Rating to Saylor’s Strategy?
While S&P appreciates Strategy’s strong access to funding and its prudent management of capital and debts, its narrow business portfolio and high concentration in Bitcoin resulted in a poor rating. Additionally, the low U.S. dollar liquidity and a weak risk-adjusted capital structure also influenced the rating. According to S&P,
- The holdings of a significant amount of Bitcoin, but the use of U.S. dollars in purchases, debt payments, interests, and dividends, creates a currency mismatch.
- Strategy has heightened cybersecurity risks due to its high concentration of Bitcoin in assets. The company’s insurance coverage for Bitcoin losses is far less than the value of its total holdings.
- The reliance on stock, preferred equity, and convertible debt to fund Bitcoin purchases is seen as a weakness, especially due to the company’s hesitance to sell its Bitcoin holdings.
- Strategy will be forced to liquidate its Bitcoin holdings at low prices if a severe crypto downtrend happens.
How the S&P Rating Could Influence Saylor’s Strategy?
‘B-’ rating usually means that the company is a risky investment, vulnerable to adverse business, financial, or economic conditions. Strategy primarily got this rating due to the inherent volatility and risk potential of Bitcoin.
Regardless of the ‘B-’ rating, Strategy’s stock (NASDAQ: MSTR) rose following the announcement, indicating market confidence. According to Michael Saylor, the rating is a milestone because Strategy has become the first Bitcoin treasury to get a rating from S&P.
Strategy remains strong, holding 640,808 BTC, which includes the purchase of 390 BTC on October 26th, 2025. While October 2025, as of now, is the slowest Bitcoin acquisition month of Strategy, its holdings have grown significantly throughout 2025. The company now has about 3% of Bitcoin’s total supply and market capitalization of $84.88 billion, with Saylor projecting it could reach a $200 trillion market capitalization by 2045.
Can Saylor’s Strategy Improve the S&P Rating?
S&P stated in its press release that it could raise the rating of Strategy in the longer term if it improves the U.S. dollar liquidity, reduces its use of convertible debt, and continues to demonstrate strong access to capital markets even during a Bitcoin stress. However, the rating will be lowered if it increases the current risks.
“We also expect the company will continue to finance payments of its convertible debt and preferred stock dividends via issuances of debt, preferred equity, and equity while maintaining strong capital markets access. We also do not assume any meaningful regulatory actions that could materially hamper Strategy’s business model in our base case,” S&P stated in its press release.
Bitcoin Price Outlook Today: S&P’s “Junk” Rating Creates a Slight Downtrend
- Fear & Greed Index: 51 (Neutral)
- Market Sentiment: Neutral
- Supply Inflation: 0.87% (Low)
- Dominance: 58.82%
- Volatility: 4.82% (Medium)
Bitcoin is slightly down from yesterday’s downtrend, primarily due to the S&P’s “junk” rating. Also, the Fed rate cut uncertainty and technical weakness affected the charts. Its failure to hold the $114,000 mark suggests a potential bearish trend in the coming days. At present, Bitcoin could face resistance at the Fibonacci levels of 117,188, 119,712, and 123,799. The supports are at 109,014, 106,490, and 102,403.
Crypto & Blockchain Expert