Strategy Builds $6.5B Cash Cushion Amid BTC Price Volatility

Strategy, a leading Bitcoin treasury firm led by Michael Saylor, has made significant strides in strengthening its balance sheet. The company's head of investor relations, Chaitanya Jain, said that Strategy has increased its dollar liquidity from $54 million to $6.54 billion, providing it with roughly four years' worth of capacity to fund interest and preferred dividends without relying on Bitcoin sales.

This increase in liquidity is a key area of focus for S&P Global Ratings, which had previously identified it as a central weakness. Strategy's debt instrument was also highlighted as a potential source of pressure, but the company has reduced its convertible debt from $8.21 billion to $6.71 billion after repurchasing $1.5 billion of its 0% convertible senior notes due 2029 in May.

Net debt has consequently dropped from about $8.16 billion to roughly $174 million as of Sept. 7. However, Strategy still carries billions of dollars of perpetual preferred stock with dividend commitments that remain part of the liquidity burden S&P considers.

Jain noted that Strategy's financing machine remained open through Bitcoin stress, raising $21 billion across common and preferred equity from January through August despite a sharp decline in BTC price to under $60,000. The company's ability to attract significant investor fundraising during this period is seen as evidence that the financing channel S&P feared could weaken has remained open.