Bitcoin News Today: S&P's Junk Rating Warns of Bitcoin Treasury Model's Precarious Gamble

MicroStrategy (MSTR), the Bitcoin-focused corporate treasury company, has been downgraded to junk status by S&P Global Ratings, raising concerns about its financial stability amid its aggressive Bitcoin accumulation strategy, according to a GuruFocus report. The agency assigned the company a B-minus rating with a stable outlook, citing significant risks tied to its heavy exposure to the cryptocurrency, limited business diversification, and liquidity mismatches, per a TradingView article. This marks the first time S&P has evaluated a firm primarily structured as a "Bitcoin treasury" entity.

S&P highlighted that MicroStrategy's balance sheet is overwhelmingly tied to Bitcoin, with approximately $74 billion in holdings as of October 2025, according to the GuruFocus report. The company has issued $15 billion in convertible bonds and preferred stock, including $5 billion in "out-of-the-money" convertible bonds maturing in 2028. From 2025, it will face annual preferred stock dividend obligations exceeding $640 million, the GuruFocus report notes. The rating agency warned that a sharp decline in Bitcoin prices could force the company to sell its holdings at depressed values or restructure its debt, which would technically constitute a default, as noted in the TradingView article.

Despite the downgrade, MicroStrategy continues to expand its Bitcoin holdings. The firm recently purchased 390 Bitcoin for $43.4 million, averaging $111,053 per coin, bringing its total holdings to 640,808 BTC valued at roughly $74 billion, according to a Benzinga report. These purchases are funded through ongoing at-the-market sales of preferred stock, with no common stock issuance in the past four weeks, according to a Yahoo Finance report. The company's leveraged strategy has yielded a 26% Bitcoin price appreciation year-to-date in 2025, underscoring its reliance on crypto volatility for returns, the Benzinga report adds.

Analysts remain divided. While S&P and others emphasize the risks, TD Cowen has reaffirmed a "Buy" rating for MSTR with a $620 price target, implying a 114% upside from recent levels, as discussed in the TradingView article. The firm argues that Bitcoin's growing mainstream adoption—such as major banks accepting it as collateral—creates long-term tailwinds. However, technical indicators suggest caution: MSTR shares remain within a descending triangle pattern, with key resistance near $305–$310 and critical support at $285, a pattern highlighted by the Benzinga report. A breakdown below $285 could accelerate losses toward $240, while a breakout above $305 might signal a bullish reversal.

Meanwhile, the Bitcoin treasury model is gaining traction beyond MicroStrategy. Strive Inc. (ASST), which recently acquired 5,000 Bitcoin through a merger, has seen its stock surge after investor Mike Alfred disclosed a stake exceeding 1 million shares, according to a Benzinga report. The company now holds an estimated 10,900 BTC, valued at $1.26 billion, and plans to raise $1.5 billion via private placements to further expand its holdings. This trend reflects broader investor appetite for corporate Bitcoin strategies, even as risks like S&P's downgrade highlight the inherent volatility of such models.