Michael Saylor’s Strategy is seeking to reassure investors about its balance sheet following the recent decline in Bitcoin prices and a sharp pullback in digital asset treasury (DAT) stocks.
The company, the world’s largest corporate holder of Bitcoin, has introduced a new credit rating dashboard based on the notional value of its preferred stock.
Strategy claims it has enough dividend payments to cover debt for another 70 years, even if Bitcoin’s price remains stagnant.
“If $BTC drops to our $74K average cost basis, we still have 5.9x assets to convertible debt, which we refer to as the BTC Rating of our debt. At $25K BTC, it would be 2.0x,” the company said in a Tuesday post on X.
Investors are increasingly concerned that falling crypto prices could push major DAT companies into liquidation, creating further downward pressure on the market.
Dividend Runway and Enterprise Cash Flow Reduce Risk
Strategy’s long dividend runway and strong enterprise software revenue are helping reduce the risk of liquidation, according to Lacie Zhang, a research analyst at Bitget Wallet.
“We view MicroStrategy’s 71-year dividend runway claim as realistic under a flat Bitcoin price scenario,” Zhang told Cointelegraph.
However, she noted that long-term projections are subject to uncertainties such as market volatility or regulatory changes.
“I’m not particularly concerned about near-term liquidations for the largest corporate BTC holder, as their diversified funding and hodl strategy positions them well for sustained growth,” she added.
Zhang also noted that Strategy’s ongoing accumulation of Bitcoin contributes to industry stability and supports deeper institutional adoption.
Hodl Strategy Could Stabilize Bitcoin Prices
Analyst Ki Young Ju, founder and CEO of CryptoQuant, said Strategy’s ability to avoid forced selling could help prevent Bitcoin from falling below key psychological levels during future downturns.
“Players like MSTR are unlikely to sell and those coins are effectively off the market,” he wrote in a Friday X post.
This could help save Bitcoin from revisiting its realized price of around $56,000 during the next bear market.
Despite Strategy’s solid positioning, other DATs have experienced significant stock crashes and declines in market net asset value (mNAV).
Companies affected include Bitmine, Metaplanet, Sharplink Gaming, Upexi, and DeFi Development Corp.
The mNAV metric compares a company’s enterprise value to the value of its crypto holdings.
An mNAV below 1 can make it difficult for firms to raise funds through new share issuance, potentially limiting future cryptocurrency purchases.
Strategy’s mNAV currently stands at 1.16, suggesting the company could theoretically issue shares to raise additional capital if needed, according to its dashboard.
