Strategy's Bitcoin Credit Model Reveals Cushion Against Debt Obligations
Strategy, the company behind Michael Saylor, has launched a public Bitcoin Credit Model that shows investors how well its Bitcoin holdings cover its debt and preferred stock obligations. The dashboard color-codes each obligation by rating tier and displays the Bitcoin floor price at which each instrument would become undercollateralized.
At current prices near $64,000, the company's $53.85 billion reserve requires only a 3.22% annual return to meet its obligations, well below its 10% reference case. Convertible debt shows substantial coverage, with the weakest tranche at 26.1x, while preferred shares are more exposed -- STRD has just 3.1x coverage and a floor of $20,587.
The launch follows Strategy's sale of 1,690 Bitcoin for $108.6 million, its fifth sale this year, and a second-quarter net loss of $8.22 billion. CEO Phong Le said new purchases will depend on shareholder value creation rather than Bitcoin's price, noting the company's dollar reserves have grown to $4.75 billion.