Journalist
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Key Takeaways
Can Strategy cover its debts?
Yes. According to the company, it had an asset-to-debt ratio of 5.9x if BTC fell to $74,000, or a coverage of 2x if it crashed to $25,000.
How did the community respond to the insurance?
Investors remain skeptical as MSCI’s delisting review hampers MSTR’s medium-term prospects.
Michael Saylor’s (Nasdaq: MSTR) strategy is in war mode. It has fended off the twin pressures of the foreclosure threat from the MSCI index and the FUD related to its debt obligations if Bitcoin’s price falls lower.
As for the latter, the company insured that it has sufficient assets to cover its debt obligations even if BTC falls to its cost base of $74,000 or crashes further.
“If $BTC falls to our average cost basis of $74,000, we still have 5.9x assets over convertible debt, what we call the BTC rating of our debt. At $25K BTC, this would be 2.0x.”
Source: Strategy
Strategy finances the BTC purchases through capital raised through debt or through the sale of core MSTR shares and other preferred shares (they have different liabilities).
For convertible debt, Strategy owes $8.2 billion, with the first due date in September 2028.
Adjusted for liabilities associated with preferred stock, total debt was $15.9 billion. Compared to its total assets, Strategy reported 3.6x assets to cover its liabilities if BTC fell to $74,000.
Market reactions to Strategy’s debt update
However, the certainty of the Strategy was met with skepticism. One critic claimed that the crisis of the company will be the tragedy of crypto.
Another analyst, Ritesh, said that the company was already preparing for a ‘bear market strategy’.
In fact, another user, Nebraskan Gooner, joked,
“Funny, they have to explain to everyone how overloaded they are.”
Perhaps one caveat to BTC falling below $74,000 or $25,000 is that Strategy’s crypto holdings to enterprise value, or mNAV, will drop to near zero.
That would be an extremely bearish sign, and the mNAV could be boosted by buying back the shares, either by selling BTC investments or taking on additional debt.
Meanwhile, mid-January 2026 MSCI rating of MSTR could determine the fate of the company.
Considering the Strategy and crypto-treasuries’ influence on BTC and the broader crypto market, the update could determine the medium-term direction for crypto.
That said, Strategy owns 641,692 BTC and is controlled by Coinbase and Fidelity; However, only 92% of the stock is traceable in the chain, according to to Arkham.
At the time of writing, BTC was trading at $87,000, about 15% away from Strategy’s cost base of $74,000.