Key Takeaways
Can Strategy cover its debt?
Yes. According to the firm, it had a 5.9x assets-to-debt ratio if BTC slips to $74k or 2x cover if it crashes to $25k.
How did the community react to the assurance?
Investors remain skeptical as the MSCI delisting review looms over MSTR’s mid-term outlook.
Michael Saylor’s Strategy (Nasdaq: MSTR) is in a war mode. It has been fending off double pressure from the MSCI index exclusion threat and FUD linked to its debt obligations if the Bitcoin price drops lower.
On the latter, the firm assured that it has sufficient assets to cover its debt obligations, even if BTC drops to its cost basis of $74k or crashes further.
“If $BTC drops to our $74K average cost basis, we still have 5.9x assets to convertible debt, which we refer to as the BTC Rating of our debt. At $25K BTC, it would be 2.0x.”
Source: Strategy
Strategy funds its BTC buys through capital raised either via debt or the sale of its main MSTR stock and other preferred stocks (they have different obligations).
For convertible debt, Strategy owes $8.2 billion, with the first maturity in September 2028.
If adjusted for obligations tied to preferred stocks, the total debt was $15.9 billion. Compared to its total assets, Strategy reported 3.6x assets to cover its liabilities if BTC slips to $74k.
Market reactions to Strategy’s debt update
However, the Strategy’s assurance was met with skepticism. One critic claimed that the firm’s crisis will be crypto’s tragedy.
Another analyst, Ritesh, said that the firm was already preparing for a ‘bear market strategy.’
In fact, another user, Nebraskan Gooner, quipped,
“Funny, they have to explain to everyone how over-leveraged they are in.”
Perhaps one of the caveats of BTC dropping below $74k or to $25k is that Strategy’s crypto holdings relative to enterprise value, or mNAV, will fall to nearly zero.
That would be an extremely bearish sign, and the mNAV can be boosted by buying back the stock, either by selling BTC holdings or taking on additional debt.
In the meantime, the mid-January 2026 MSCI review of MSTR could determine the firm’s fate.
Given the Strategy and crypto treasuries’ influence on BTC and the broader crypto market, the update could set the direction for crypto in the mid-term.
That said, Strategy holds 641,692 BTC and is custodied by Coinbase and Fidelity; however, only 92% of the stash is traceable on-chain, according to Arkham.
As of writing, BTC traded at $87k, about 15% away from Strategy’s cost basis of $74k.
