Strategy (formerly MicroStrategy) confirmed that even if Bitcoin (BTC) were to fall to $25,000, well below the average purchase price of $74,000, the asset-to-liability collateral ratio would remain at 2.0x.
This comes as the company’s share price has fallen by 49% and it faces the possibility of being removed from the MSCI index, with a decision expected by January 2026.
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(Micro)Strategy’s $16B Debt Stack Is Backed by 3.6x in Bitcoin
In a recent post on X (formerly Twitter), the company emphasized the strength of its balance sheet by highlighting what it calls the “BTC rating” of its convertible notes.
“Even if BTC were to fall to its average cost basis of $74,000, the equity against the convertible would still be 5.9x. This is what we call the debt BTC rating. If BTC were $25,000, it would be 2.0x,” the post reads.
The company says that even if Bitcoin were to fall to $74,000, its average cost basis, or BTC reserve value, would still be 5.9 times that of a convertible bond. In a more severe recession, if Bitcoin is $25,000, the asset-to-liability ratio will remain at 2.0x.
Based on the current Bitcoin price of $87,812, the company shows a significantly stronger asset-to-liability profile. According to Credit Dashboard, Strategy has $8.214 billion in convertible debt with maturities between 2028 and 2032.
Most of these convertible bonds have very high BTC valuations ranging from 7x to over 50x. BTC rating on total convertible debt is 6.9x.
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Under the debt layer, the company holds $7.779 billion in preferred stock across five series (STRF, STRC, STRE, STRK, and STRD). The average duration of these is long, often lasting 8 to 10 years or more. Additionally, it carries a slightly higher risk profile than the senior debt stack.
The preferred stock has a BTC rating of 3.6x, indicating strong but thin collateral compared to the company’s convertible debt. The company’s total debt, including debt and preferred stock, is $15.993 billion.
At current Bitcoin prices, these debts are backed by a 3.6x consolidated BTC rating, meaning the company holds more than 3.5x the value of its outstanding debt in Bitcoin-denominated assets.
This indicates that the company is very well capitalized and overcollateralized with a significant BTC buffer, making it highly resilient to Bitcoin price declines. This provides significant financial stability and strategic flexibility.
According to SaylorTracker data, Strategy holds 649,870 BTC worth $56.99 billion, making it the world’s largest corporate holder.
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Strategies for dealing with market declines and index uncertainty
Notably, this revelation comes at a time when the company is under significant pressure. MSTR stock has fallen more than 49% since early October and is trading at levels last seen at the end of 2024.
The strategy also faces increased scrutiny from MSCI. We are considering criteria to exclude companies whose digital assets account for more than 50% of their total assets.
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A decision is expected to be made by January 15, 2026. JPMorgan’s research estimates that if additional index providers adopt similar rules, the potential outflow could jump to as much as $8.8 billion. According to the bank,
“MSCI is currently considering removing MicroStrategy and other digital asset treasury companies from its stock indexes. If MicroStrategy were removed from MSCI indexes, outflows could reach $2.8 billion, and $8.8 billion from all other stock indexes if other index providers choose to follow MSCI.”
The company was also removed from the S&P 500, missing out on another important opportunity. Adding to the challenge was that after six consecutive weeks of buying Bitcoin, the company stopped its streak of buying. This comes as mNAV premiums have collapsed towards near parity.
Nevertheless, the company is also making other strategic moves. Blockchain information firm Arkham reported that Strategy has transferred some of its assets from Coinbase to Fidelity Custody. This reflects plans to split storage risk among multiple regulated providers.
“Strategy (MSTR) has diversified its custodians away from Coinbase and has moved 58,390 Bitcoin (currently $5.1 billion) into Fidelity custody over the past two months…a total of 165,709 BTC ($14.5 billion) has been transferred to Fidelity custody,” Arkam said.
As such, Strategy remains overcollateralized and structurally resilient despite increased market pressures, index uncertainty, and sharp declines in stock prices. Bitcoin-backed balance sheets continue to provide a substantial cushion against volatility. At the same time, continued efforts to diversify storage risks demonstrate a company’s commitment to long-term stability even in a difficult environment.
