S&P gives MicroStrategy a "B- junk bond" credit rating for these 4 reasons.

S&P Global Ratings has given Strategy (MicroStrategy) a credit rating of B-, citing four main concerns, but still providing a stable outlook. (Background: MicroStrategy did not increase its Bitcoin holdings last week, Saylor: $9 billion profit reminds us to HODL) (Background context: MicroStrategy's Bitcoin scale is “approaching Amazon's cash” level, with thoughts of dollar depreciation entering corporate operations) S&P Global Ratings (Standard & Poor's) has issued its first formal rating for Strategy (MicroStrategy), which uses Bitcoin as its core reserve asset, placing the company in the speculative grade bond B- range, but giving a stable outlook. The four reasons behind the “B-” rating S&P pointed out four major concerns in the report. First, the company holds 640,808 Bitcoins, and its balance sheet is deeply tied to price fluctuations. Second, the company's debt is denominated in US dollars; if Bitcoin's market suddenly drops, the speed of realization and dollar liquidity may be insufficient. Third, the rating agency views Bitcoin's fluctuation as a factor weakening capital strength, leading to a gap in risk-adjusted capital. Finally, the company's software business has limited cash flow, making it difficult to provide a buffer for its large coin holdings. S&P noted that if dollar liquidity improves and the debt structure becomes more balanced, there is a chance for an upgrade; conversely, severe market pressure may trigger forced liquidation and lead to a downgrade. Bonds rated B- mean that the rating agency believes the issuer currently has the ability to repay its debts, but its future debt repayment capacity is very weak. If there are negative changes in the overall economy or the company's own operational situation, the risk of default will significantly increase. Bonds classified as speculative grade or junk bonds. The fact that MicroStrategy received a “B-” score shows that traditional institutions have consistent concerns about emerging crypto business models. For all companies with Bitcoin as an underlying asset, how to maintain higher US dollar cash, diversify income sources, and manage debt maturity carefully will be necessary conditions for improving ratings. Market reaction: slight price increase Despite being labeled as junk bonds, on the day the news was announced, MicroStrategy's stock price still rose by 2.27%. Some investors believe that S&P may underestimate Bitcoin's long-term potential through traditional models; others see this rating as a positive outcome because it brings the highly uncertain asset class back into a comparable credit framework. Next stop: integration, regulation, and competition At the convergence point of the inverted pyramid, S&P's rating of MicroStrategy reveals both limitations and provides a roadmap. For investors, the junk grade label does not necessarily mean rejection, but rather a reminder that interest rates, liquidity, and price fluctuations will dominate the return curve. For crypto companies, wanting to achieve higher scores on Wall Street, the answer has already been written in the rating footnotes: strengthen cash pools, diversify revenues, and reduce price sensitivity. This intersection of traditional finance and crypto assets has just entered deep waters, with risks and opportunities spreading simultaneously. Related reports MicroStrategy's investment in Bitcoin yields “outperforming the Big Seven U.S. stocks,” Michael Saylor: BTC return rate reaches 100.5% Exclusive interview with BNC CEO David: Revealing the past and present of BNB version MicroStrategy Bitcoin breaks $110,000" MicroStrategy again invests $450 million to increase positions by 4048 BTC, total holdings rise to 636,000 coins. <S&P gives MicroStrategy a “B- junk bond” credit rating for these four reasons> This article was first published on BlockTempo “BlockTempo - the most influential blockchain news media.”