Strategy doesn’t sweat Bitcoin crash since reserves exceed debt obligations

Strategy is reassuring investors that its towering Bitcoin stash still dwarfs its debt—even as its stock price keeps falling faster than a hardware wallet dropped off a balcony.

Michael Saylor’s company said its Bitcoin holdings would be worth nearly six times its outstanding convertible notes if the cryptocurrency fell back to Strategy’s average purchase price, a metric it now proudly calls its “Bitcoin Rating.”

Even in a doomsday-level market plunge, Strategy says the ratio would hold at a still-comfortable 2.0x, based on figures compiled by BitcoinTreasuries.

The upbeat math arrives at an awkward moment: Strategy’s share price has tumbled in recent weeks, culminating in its removal from the S&P 500 on November 25.

Adding to the pressure, MSCI is expected to rule early next year on whether companies that hold most of their assets in cryptocurrency should even appear in equity indices. JPMorgan analysts warned the decision could spark forced selling, prompting parts of the crypto community to accuse the bank of attacking Strategy to profit from a supposed short position.

Perera, however, found no evidence of a JPMorgan short in SEC filings—only share sales and some put options.

Institutions aren’t abandoning Bitcoin—just Strategy

Analyst Shanaka Anselm Perera reported that institutional investors pulled significant capital from the company in the third quarter—apparently deciding there are safer ways to gain Bitcoin exposure.

As JPMorgan trimmed its stake, heavyweight players like Harvard University moved into BlackRock’s spot Bitcoin ETF, a shift analysts say helped erase Strategy’s long-standing premium over its underlying Bitcoin.

For the first time in five years, the company’s market cap now sits below the value of its BTC holdings.

Bitwise analyst Matt Hougan noted that crypto-heavy companies typically trade at discounts anyway due to operational costs and perceived risk. Strategy, undeterred, continues scooping up Bitcoin, moving more into custody and raising additional capital to buy even more.