Strategy Unfazed by Prolonged Bitcoin Downtrend
Strategy, the largest corporate holder of Bitcoin led by Michael Saylor, has released a stress test of its capital structure in response to the current Bitcoin crash scenario. The company claims it can withstand an annual decline of 11.4% in Bitcoin's price for nearly six years without affecting its ability to fund interest payments and preferred stock dividends.
According to Strategy's recent X post, if Bitcoin were to fall by 11.4% annually for 5.8 consecutive years at its current capital structure, the company would still be able to maintain a 1.0x BTC rating. This means it could continue to meet its financial obligations even in the face of prolonged market downturns.
Strategy has also undergone a recent overhaul of its financing model and launched a new metric framework that takes into account its growing preferred stock and convertible debt obligations. The company aims to allow it to resume buying Bitcoin, which is currently trading at $64,428, nearly 49% below its all-time high.