Strategy Unveils New Credit Gauge To Calm Debt Fears After Bitcoin...

Strategy said it has a 70-year dividend runway even after Bitcoin’s slide, rolling out a new credit rating metric to ease fears over DAT liquidation risks.

Michael Saylor’s Strategy is attempting to calm investor concerns about its balance sheet after the recent Bitcoin market downturn and a sharp pullback in digital asset treasury (DAT) stocks.

Strategy, the world’s largest corporate Bitcoin (BTC) holder, has rolled out a new credit rating dashboard based on the company’s preferred stock notional value, and claims to have another 70 years’ worth of dividend payment runway to service its debt, even if Bitcoin’s price remains flat.

“If $BTC drops to our $74K average cost basis, we still have 5.9x assets to convertible debt, which we refer to as the BTC Rating of our debt. At $25K BTC, it would be 2.0x,” said Strategy in a Tuesday X post.

The move comes as investors grow increasingly worried that falling crypto prices could force large DAT companies into liquidation, adding more selling pressure to an already weakened market.

Related: Strategy rides out Bitcoin crash, still on track for S&P 500 spot: Matrixport

Strategy’s dividend runway and “robust” enterprise software cash flow are significantly reducing the liquidation risks for the company, according to Lacie Zhang, research analyst at Bitget Wallet.

“We view MicroStrategy’s 71-year dividend runway claim as realistic under a flat Bitcoin price scenario,” however, long-term projections are dependent on several uncertainties, including “market volatility or regulatory shifts,” Zhang told Cointelegraph.

Strategy’s ongoing accumulation, she added, has contributed to broader “industry stability” and supported deeper institutional adoption.

Related: Michael Saylor’s Strategy kickstarts November with $45M Bitcoin buy

Source: CoinTelegraph