Strategy’s $66B Bitcoin machine hinges on capital markets, not BTC price: Report
Strategy’s main risk is less a Bitcoin crash than a prolonged loss of access to capital markets. Its 840,447 BTC is backed by about $22 billion in debt and preferred claims, and the company needs continuous financing to cover roughly $1.76 billion a year in interest and preferred dividends without selling Bitcoin. A stress test suggests BTC would have to fall about 96% before reserves and holdings fail to cover convertible notes, but funding pressure would grow if Strategy’s share price and market net asset value also fell, making new capital harder and more expensive to raise. The company’s debt does not include a BTC-linked margin call. Cash reserves currently cover about 2.6 times annual charges. Strategy has already sold BTC four times since May to fund dividends, buybacks, and reserves, though management says it still plans to resume purchases later this year.
