Michael Saylor's MSTR Opens Its Bitcoin Credit Playbook To Investors Amid BTC Selling Spree

Strategy (MSTR) executive chairman Michael Saylor announced Wednesday the launch of a public Bitcoin (BTC) Credit model designed to show investors how well the company’s Bitcoin holdings cover its debt and preferred stock obligations.

The model also shows credit spreads, Bitcoin coverage ratios and the price levels at which each obligation would become undercollateralized.

“Our BTC Credit model uses a 10% BTC ARR reference case, color-codes spreads by tier (Investment Grade, High Yield, Distressed), and shows BTC Floor prices below which instruments are undercollateralized,” Saylor wrote in a post on X.

At Bitcoin’s price of around $64,000, Strategy’s model values its reserve at $53.85 billion. Strategy assumes Bitcoin will return 10% annually, but calculates that only a 3.22% annualized return would be needed to meet its obligations.

The lower breakeven rate suggests a cushion, but that cushion could narrow if Bitcoin falls, volatility rises, or if the company adds more debt or preferred stock.

MSTR stock rose as much as 1.5% in pre-market trade. On Stocktwits, retail sentiment around Strategy shares trended in ‘bearish’ territory over the past day, while retail sentiment around Bitcoin fell to ‘extremely bearish’ from ‘bearish’ territory.