Bitcoin News Today: Bitcoin's Allure vs. Liquidity Risks: S&P Drops Strategy from Index

S&P Global Ratings has downgraded Strategy Inc. to a junk-level credit rating, marking the first time a Bitcoin-centric company has been evaluated by the agency. The move excludes Strategy, formerly known as MicroStrategy, from the S&P 500 index, citing concerns over its heavy exposure to cryptocurrency and liquidity risks, in S&P's initial rating. The company, led by CEO Michael Saylor, holds approximately 640,808 Bitcoin, valued at $74 billion, making it the largest corporate Bitcoin holder, according to a CryptoNews report. The decision highlights growing scrutiny over corporate crypto strategies as traditional financial institutions reassess risk models amid volatile markets.

The S&P downgrade underscores the precarious balance Strategy faces. While the firm has aggressively accumulated Bitcoin since 2020 using equity and debt financing, its reliance on digital assets has raised red flags. Analysts note that Strategy's $47.44 billion investment in Bitcoin is funded by $15 billion in convertible debt and preferred equity, with $5 billion in out-of-the-money debt maturing by 2028, according to Bloomberg. S&P warned that a simultaneous Bitcoin price slump and debt repayment could force the company to liquidate assets at unfavorable prices or face restructuring, which it would classify as a default.

Strategy's Bitcoin strategy, however, remains unshaken. The company recently added 390 BTC ($43.4 million) to its treasury through At-The-Market equity programs, pushing its total holdings to 640,808 BTC, according to CryptoNews. Saylor has long argued that Bitcoin is a superior store of value compared to fiat currencies, a stance reflected in his projections of a $2 trillion Bitcoin portfolio by 2040 under a 25% compound annual growth rate, a Coinotag analysis. Such optimism is echoed by Bitcoin expert Adam Livingston, who notes that historical performance—82% CAGR over the past decade—supports aggressive growth assumptions.

The exclusion from the S&P 500 is not an isolated event. Other firms are experimenting with crypto treasuries, albeit with mixed results. Bit Origin, a Dogecoin-focused treasury company listed on Nasdaq, has replicated Strategy's playbook by conducting DOGE-denominated private placements to boost its coin-per-share ratio, Bitcoinist reports. Meanwhile, SpaceX, owned by Elon Musk, moved $134 million in Bitcoin to new wallets in October 2025, sparking speculation about custodial transfers, Crypto.news reported. These moves reflect a broader trend of institutional adoption, though market volatility remains a challenge. Bit Origin's stock, for example, has dropped 58% year-to-date despite a 170% surge since its treasury initiative began, according to Bitcoinist.

Traditional financial players are also adapting. JPMorgan Chase & Co. announced plans to allow institutional clients to use Bitcoin and Ether as collateral for loans by year-end, El-Balad reported. This follows the bank's earlier acceptance of crypto-linked ETFs as collateral, underscoring growing confidence in digital assets.

While Strategy's exclusion from the S&P 500 highlights risks, it also underscores the transformative potential of Bitcoin as a corporate asset. Saylor's vision of a "Bitcoin treasury" challenges conventional financial models, even as skeptics question the sustainability of such strategies. For now, the company's trajectory remains a bellwether for corporate crypto adoption, with its success or failure likely to influence broader market perceptions.