S&P hits Strategy with B- ‘junk bond’ rating, citing narrow Bitcoin focus

S&P Global Ratings has given Michael Saylor’s Strategy a “B-” credit rating, placing it in the speculative, non-investment-grade territory — often referred to as a “junk bond” — although it said the Bitcoin treasury company’s outlook remains stable.

“We view Strategy’s high bitcoin concentration, narrow business focus, weak risk-adjusted capitalization, and low US dollar liquidity as weaknesses,” the credit rating platform said in a review of Strategy on Monday.

Strategy has accumulated its 640,808 BTC treasury mainly via equity and debt financing. The stable outlook assumes the company will prudently manage convertible debt maturities and maintain preferred stock dividends, potentially through additional debt issuance, it said.

S&P Global highlighted that Strategy faces an “inherent currency mismatch,” with all debt due in US dollars while much of its dollar reserves are allocated to fund its software business, which operates at approximately breakeven in earnings and cash flow.

The credit rating is significant as it marks the first time a Bitcoin‑treasury-focused company has received an S&P Global assessment — establishing a benchmark for TradFi to evaluate the credit risk of companies that center their business models around Bitcoin and crypto.

Strategy is on par with Sky Protocol

Strategy received the same score as decentralized stablecoin issuer Sky Protocol, previously MakerDAO, in August.

S&P Global pointed to Sky Protocol’s high depositor concentration, centralized governance and weak capitalization to justify the B-minus rating.