Bitcoin Updates: S&P Highlights Bitcoin's Price Swings as Liquidity Concerns Lead to Speculative Grade Rating

S&P Global Ratings has given Strategy a B- issuer credit rating, classifying it as speculative grade.

, a company recognized for its substantial involvement with , received this rating due to S&P’s concerns about its concentrated business model, limited liquidity in U.S. dollars, and considerable financial risks associated with the unpredictable nature of cryptocurrency. The downgrade, revealed on October 27, 2025, highlights the agency’s belief that Strategy’s approach—primarily holding Bitcoin as its reserve asset—creates major challenges for liquidity and the stability of its capital structure, according to a .

This rating points to a "currency mismatch" between Strategy’s debt and dividend commitments, which are denominated in U.S. dollars, and its main asset, Bitcoin. S&P cautioned that this could lead to liquidity issues if Bitcoin’s value drops. The company currently has around $8 billion in convertible debt, with $5 billion of that not currently profitable, and is responsible for $640 million in annual preferred dividends. S&P mentioned that Strategy intends to meet these obligations through at-the-market equity offerings, but stressed that its dependence on capital markets and the volatility of Bitcoin remain significant risks, the report noted.

Although Strategy’s Bitcoin holdings, valued at over $73 billion, greatly surpass its outstanding debt, S&P pointed out that the company’s risk-adjusted capital (RAC) ratio was "significantly negative" as of June 30, 2025. The agency determines this figure by deducting the market risk of Bitcoin from the company’s equity, which weakens its capital standing. Furthermore, Strategy reported a negative cash flow of $37 million for the first half of 2025, with most of its pre-tax income coming from unrealized gains on its Bitcoin assets—holdings that do not produce cash, as the report observed.

The agency also warned that liquidity could become strained if Bitcoin’s price declines before the company’s debt matures in 2028. While S&P recognized Strategy’s track record of careful debt management, it cautioned that a sharp drop in Bitcoin’s value or restricted access to capital markets could lead to another downgrade. On the other hand, an upgrade would require better dollar liquidity, less dependence on convertible debt, and proof of resilience in capital markets during periods of Bitcoin price volatility, according to the Miami Daily article.

Strategy’s business strategy, which centers on acquiring and holding Bitcoin as a reserve asset funded by both equity and debt, has raised concerns about concentration risk. The company also runs a smaller software analytics segment that breaks even, but its focus on Bitcoin largely shapes its credit profile. S&P’s analysis suggested that the rating may attract high-yield, high-risk credit investors, but it also highlights the company’s exposure to market swings, as reported by the same source.

This downgrade occurs as Bitcoin faces heightened market uncertainty and considerable price fluctuations in recent months. While Strategy’s leadership has not issued a statement regarding the S&P rating, they have previously reiterated their long-term belief in Bitcoin as a store of value. According to the report, the company’s future credit outlook will largely depend on Bitcoin’s price stability and its continued access to capital markets despite its speculative nature.