Strategy launches Bitcoin credit model to track capital risk

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Strategy launches Bitcoin credit model

Highlights

Strategy held 843,775 BTC at the end of Q2.
The company carried $6.71 billion in convertible notes.
The model uses a 10% Bitcoin return assumption.
Each security receives a credit tier and BTC floor price.

The model assigns each security a credit tier, spread, and Bitcoin floor price, according to BeInCrypto. Strategy held 843,775 BTC at the end of the second quarter and carried $6.71 billion in convertible notes, alongside several preferred-stock series.

Credit risk gets a Bitcoin price

The framework uses a 10% annual Bitcoin return as its reference case. Each bond or preferred instrument is then classified from investment grade through high yield to distressed, using a color-coded system that resembles traditional fixed-income analysis.

The most important output is the floor price. That number marks the Bitcoin level below which a particular security would no longer be fully collateralized by the company’s BTC holdings.

That gives investors a direct way to judge how much cushion remains between Bitcoin’s market price and the point where parts of Strategy’s capital structure would become more exposed. It also makes the company easier to compare with conventional credit issuers, even though major rating agencies do not currently rate its preferred shares or convertibles.

Cash reserves add another buffer

Strategy also holds $3.75 billion in cash, enough to cover roughly 2.1 years of dividend and interest payments. Preferred dividends paid to date have reached about $1.06 billion.

The company has also used Bitcoin sales to manage its preferred-stock structure. In August, proceeds from BTC sales were directed toward repurchases of STRC preferred shares, showing that the crypto reserve is increasingly being used as an active source of liquidity rather than simply held on the balance sheet.

Bitcoin volatility is now easier to map

The new dashboard matters because Strategy’s debt and preferred securities are closely tied to the value of its Bitcoin reserve. Investors previously had to estimate how far BTC could fall before specific securities became vulnerable. The floor-price framework makes that risk more visible.

That added transparency may help institutional investors compare Strategy’s securities with traditional corporate credit, but it also highlights how dependent the structure remains on Bitcoin. A prolonged decline in BTC would narrow collateral coverage, increase perceived credit risk and put more pressure on the company’s financing model.

We also reported that Strategy sells $467 million in stock but leaves Bitcoin untouched.

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