Strategy Publishes Bitcoin Return Threshold for Potential Restructuring

Strategy, a financial company, has published its Bitcoin return threshold below which it may have to restructure. The threshold is -11.34% and represents the lowest constant annual rate of return that maintains at least 1.0x coverage of net debt and preferred stock through its Bitcoin reserve after funding interest and preferred dividends over the modeled period.

The calculation covers $18.993 billion in net debt and preferred claims across a weighted 5.79-year credit duration. Strategy has not said what any potential restructuring would involve, only that it may consider it if the threshold is breached.

Strategy's newly published metric shows Bitcoin could decline at a constant annual rate of 11.34% across the weighted duration of the company's credit structure before its modeled coverage falls below 1.0x.