Strategy Says Even a Bitcoin Crash to $25,000 Wouldn’t Break Its Balance Sheet
Strategy confirmed its assets-to-debt ratio would remain 2.0x even if Bitcoin fell to $25,000, demonstrating balance sheet strength amid market pressure.Summary
Strategy (formerly MicroStrategy) asserted the resilience of its balance sheet, stating that even if Bitcoin (BTC) crashed to $25,000—far below its $74,000 average purchase price—its assets-to-debt collateral ratio for convertible debt would remain at 2.0x. At the average cost basis of $74,000, the ratio is 5.9x. The company holds $8.214 billion in convertible debt, backed by substantial Bitcoin reserves, resulting in a 6.9x BTC Rating for this debt. Including preferred stock, total obligations of nearly $16 billion are supported by a consolidated BTC Rating of 3.6x at current prices.
This assurance comes as Strategy faces market pressure, with its stock declining over 49% since October, and uncertainty regarding potential exclusion from MSCI indices if digital assets constitute 50% or more of total assets. JPMorgan estimates potential outflows of up to $8.8 billion if similar index rules are adopted. Despite breaking its recent Bitcoin buying streak, Strategy is strategically diversifying custodial risk, moving significant holdings from Coinbase to Fidelity Custody, signaling a focus on long-term stability.
(Source：BeInCrypto)