Strategy Says It Could Withstand Bitcoin Falling 11.4% Annually for Nearly Six Years

The stress test

Strategy says its current financial structure could withstand Bitcoin falling by 11.4% every year for 5.8 years while still covering interest payments and preferred dividends.

“At today’s capital structure, BTC could fall 11.4% annually for 5.8 years.”

The company’s model puts its Bitcoin “floor” at a 1.0x BTC Rating, meaning its Bitcoin holdings would still cover the debt and preferred stock included in the calculation.

Not a Bitcoin prediction

Strategy stressed that the figure is based on its own internal metric and is not a traditional credit rating or a prediction that Bitcoin will actually fall for six consecutive years.

The company currently holds 843,775 Bitcoin and has a $3.225 billion cash reserve. However, the model still depends on factors such as access to capital, refinancing conditions, dividend payments and the future price of Bitcoin.

Disclaimer: This content does not constitute trading or investment recommendations. It’s essential to conduct your own research before purchasing any cryptocurrency or investing in any services.