MicroStrategy, now known as Strategy, asserts that its bitcoin holdings provide a strong buffer against debt even if the cryptocurrency's price falls sharply to $25,000. This statement comes amid a 49% decline in its stock price and potential exclusion from MSCI indices. The company highlights its overcollateralized balance sheet to demonstrate financial resilience.
Strategy has emphasized the robustness of its finances in a recent post on X, stating, “If BTC drops to our $74,000 average cost basis, we still have 5.9x assets to convertible debt, which we refer to as the BTC Rating of our debt. At $25,000 BTC, it would be 2.0x.” This metric underscores how the company's bitcoin reserves exceed its liabilities by a significant margin, even in adverse scenarios.
The firm holds 649,870 BTC, valued at $56.99 billion based on a current price of $87,812. Its total convertible debt amounts to $8.214 billion, with maturities from 2028 to 2032 and a BTC Rating of 6.9x. Below this, $7.779 billion in preferred stock across series STRF, STRC, STRE, STRK, and STRD carries a 3.6x BTC Rating. Combined obligations total $15.993 billion, supported by a consolidated 3.6x BTC Rating.
Despite this strength, Strategy faces challenges. Its shares have dropped more than 49% since early October, trading at levels not seen since late 2024. MSCI is reviewing the company for potential exclusion from its indices by January 15, 2026, due to digital assets comprising over 50% of total assets. JPMorgan estimates $2.8 billion in outflows if excluded from MSCI alone, potentially rising to $8.8 billion if other providers follow suit.
The company recently paused its bitcoin buying streak after six weeks and saw its market net asset value premium approach parity. To mitigate risks, Strategy transferred 58,390 BTC, worth $5.1 billion, to Fidelity Custody over the past two months, bringing the total to 165,709 BTC or $14.50 billion there. This move diversifies custody away from Coinbase, enhancing long-term stability amid market pressures.