Strategy Inc.'s Bitcoin Reserve Has 'Substantial' Coverage, Internal Model Shows
Strategy Inc. (Nasdaq: MSTR) has published a chart illustrating how far Bitcoin's price could decline before its reserve matches the obligations counted for each security, according to an internal calculation.
The company states that Bitcoin would need to fall by 83% from current levels for STRC to reach a 1x BTC Rating. A 1x BTC Rating means that the modeled value of Bitcoin equals the notional debt and preferred-stock claims included for that instrument.
Strategy's chart lists different thresholds for each security, with STRC at $13,136, STRD at $17,517, and debt reaching 1x at zero. The gap between Bitcoin's price and STRC's threshold supports Strategy's argument that its Bitcoin reserve provides substantial modeled asset coverage.
The company cautions that the BTC Rating is illustrative, excludes potential cross-defaults, and is not an external credit rating. It also notes that the thresholds shown on the chart represent a snapshot rather than fixed protection levels.