Michael Saylor shrugs off S&P’s ‘junk’ rating with $43M Bitcoin buy

Key Takeaways

How much Bitcoin does Strategy now hold in total?

Strategy holds 640,808 BTC valued at roughly $47.44 billion, with an average purchase price of $74,032 per Bitcoin.

How did analysts react to the rating?

Analysts argued the rating unfairly treats Bitcoin as a liability and discourages corporate Bitcoin adoption.

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Strategy (formerly MicroStrategy), led by Bitcoin [BTC] advocate Michael Saylor, has added to its already massive Bitcoin portfolio with another strategic purchase.

Saylor’s Strategy adds more Bitcoin

The company acquired 390 BTC worth approximately $43 million at an average price of $114,562 per coin, reinforcing its status as the world’s largest corporate holder of the cryptocurrency.

With this addition, Strategy’s total Bitcoin reserves climbed to 640,808 BTC, valued at about $47.44 billion, purchased at an average cost of $74,032 per coin.

In fact, just a day before the announcement, Saylor dropped his trademark hint on X, posting Strategy’s Bitcoin portfolio tracker with the caption, “It’s Orange Dot Day.”

MSTR stock performance and S&P Global rating

Following the disclosure, Strategy’s (MSTR) shares reacted positively. 

At press time, MSTR was trading at $295.63, a 2.27% increase over the previous session, based on Google Finance data. Yet, despite the brief uptick, the company’s shares remained down 4.8% from $314 over the past month.

This coincided with S&P Global assigning Strategy a B- credit rating earlier this week, placing the firm solidly in non-investment-grade territory, commonly referred to as “junk” status.

For context, the lowest investment-grade rating on S&P’s scale is BBB.

The S&P report acknowledged that the majority of Strategy’s balance sheet is concentrated in Bitcoin and predicted that the company will continue expanding its holdings significantly. This, it said, reinforces its view that Strategy’s capital structure remains “weak.”

However, despite the criticism, the downgrade appears to have done little to sway Saylor’s long-term vision.

Adam Livingston weighs in

Echoing Saylor’s sentiment, Livingston, a Market Analyst and supporter of Saylor’s Bitcoin strategy, argued that the rating unfairly penalizes Strategy for adopting Bitcoin as its primary treasury asset.

He contended that S&P’s assessment “misrepresents Bitcoin as a liability rather than an asset,” effectively discouraging corporate Bitcoin adoption.

According to him, if the firm’s reserves consisted of U.S. Treasuries instead, the agency would have labeled them as “high-quality capital.”

Bitcoin price action and more

Meanwhile, BTC was trading at $114,236.48, down 1.48% over the past 24 hours, according to CoinMarketCap.

With Bitcoin’s volatility at record lows and institutional demand cooling, the Strategy’s ability to leverage debt and equity for further accumulation could be tested.