Abstract
The S&P rating on Strategy shows that when bitcoin is fully deducted from adjusted common equity, total adjusted capital turns negative and the rating is forced to anchor on weak capitalization. That outcome is predictable under the 2024 RACF and 2025 hybrid criteria. The practical takeaway for issuers seeking higher credit ratings is to build recognized TAC first via retained earnings and qualifying hybrids, design preferreds that truly defer without governance penalties, and disclose bitcoin, liquidity, and hedging in RACF language. A second takeaway is that agencies will flag the same underlying risk—“long BTC, short USD”—in several places unless the issuer presents a clear fiat-liquidity ladder. These lessons apply not only to Strategy but also to peers like Strive and Metaplanet pursuing bitcoin-backed credit.