S&P Assigns ‘Junk’ Bond Rating to Strategy

S&P assigns B- rating to Strategy, citing Bitcoin concentration and low liquidity.

S&P Global Ratings has assigned a B- credit rating to Strategy, categorizing its securities as ‘junk’ bonds. 

The decision was influenced by the excessive concentration of assets by Michael Saylor in Bitcoin, while having debt obligations in US dollars. S&P also noted Strategy’s low dollar liquidity and negative risk-adjusted capital. 

The agency emphasized that a rating upgrade is “unlikely in the next 12 months.” To improve its rating, the company needs to enhance financial stability, reduce reliance on convertible debt, and maintain broad access to capital markets even during downturns in the leading cryptocurrency’s price.

Matthew Sigel, head of digital asset research at VanEck, explained that “Strategy can service its debt for now but is vulnerable to shocks.” 

🚨Strategy Inc Assigned ‘B-‘ Issuer Credit Rating; Outlook Stable at S&P

That’s high-yield territory. Able to service debt for now, but vulnerable to shocks.

S&P data: B issuers carry ~15% 5-yr default risk. https://t.co/ingZu6DRmH pic.twitter.com/RrHOWYmzVG

— matthew sigel, recovering CFA (@matthew_sigel) October 27, 2025

Analysts at TD Cowen remain optimistic about the company and its shares. The target price for the securities is $620, according to The Block. 

Experts highlighted that the firm effectively leverages investor interest in risk and high yield to purchase digital gold. Meanwhile, each Strategy share accounts for more coins as it reduces new stock issuance. 

TD Cowen expects the company to accumulate 900,000 BTC by 2027 — over 4% of the total supply of the leading cryptocurrency. 

Purchasing Pace Slows 

From October 20 to 26, Strategy acquired 390 BTC worth $43.3 million. The average purchase price was $111,117 per coin. 

In the past month, the company accumulated 778 BTC — one of the lowest figures in its history. For comparison, in September, Strategy increased its reserves by 3,526 BTC, and in July and May — by 31,466 BTC and 26,695 BTC, respectively. 

According to CryptoQuant analyst Maartun, the sharp slowdown in purchasing is due to difficulties in raising capital. The equity issuance premium dropped from 208% to 4%. 

5. Capital is harder to raise
Equity issuance premiums have dropped from 208% → 4%. pic.twitter.com/ElvBcbcj4U

— Maartunn (@JA_Maartun) October 26, 2025

David Duong, head of investment research at Coinbase Institutional, believes the decline in activity among crypto treasury companies was also caused by the market crash on October 11.

Where are the DATs? BTC digital asset treasury companies (DATs) have largely ghosted the post-Oct 10 drawdown and are yet to re-engage. Over the last two weeks, BTC buying by DATs fell to near year-to-date lows and has not meaningfully recovered, even on green days. A short 🧵👇… pic.twitter.com/uscTvUSOTu

— David Duong🛡️ (@Dav1dDuong) October 25, 2025

“In the last two weeks, the volume of Bitcoin purchases by such firms has fallen to year-to-date lows and has not shown significant recovery even on growth days,” he noted. 

What About Ethereum? 

Ethereum-focused company ETHZilla announced the sale of assets worth $40 million to finance a stock buyback. 

“The firm has already repurchased about 600,000 of its own securities for $12 million as part of a previously approved $250 million buyback program,” the press release stated. 

ETHZilla will continue to sell reserves until the premium to NAV — the main indicator of the company’s attractiveness to investors — stabilizes. At the time of writing, the firm holds 102,240 ETH worth $420 million. 

The largest holder remains Bitmine. Last week, the company purchased 77,055 ETH worth approximately $319 million, increasing its total reserves to 3.3 million ETH, or $13.7 billion. 

Previously, the firm also took advantage of the market correction to add 104,336 ETH worth $417 million to its reserves.