MicroStrategy, the Bitcoin treasury company, is marketing a roughly $13,400 "BTC Floor" for STRC, its variable-rate cumulative perpetual preferred stock. The SEC-filed metric defines this as the Bitcoin price at which MicroStrategy's illustrative STRC coverage ratio reaches 1.0x.
With Bitcoin trading near $78,000, the floor label represents a substantial buffer. However, the metric carries no claim on MicroStrategy's Bitcoin holdings and has no direct solvency or recovery meaning.
How the Coverage Ratio Works
The BTC Rating divides the dollar value of MicroStrategy's Bitcoin reserve by a covered-notional denominator. The floor calculation reverses this: covered notional divided by the number of Bitcoin held.
According to MicroStrategy's August 21 dashboard filing, the company held 840,447 Bitcoin valued at $64.718 billion at a Bitcoin price of $77,004. The covered notional was approximately $11.28 billion, calculated from $6.714 billion of debt, minus $6.69 billion of USD assets, plus $1.284 billion of senior STRF and $9.972 billion of STRC. This produced a coverage ratio of 5.7x.
MicroStrategy reports an unrounded floor of $13,415. Changes in spot Bitcoin price move the displayed rating while keeping the 1.0x threshold unchanged, assuming all company inputs remain fixed.
Factors That Could Shift the Floor
USD assets materially affect the threshold. Depleting the $1.59 billion USD Cash pool without reducing debt or preferred notional would raise the modeled floor to approximately $15,313. Depleting all $6.69 billion of USD assets on uses that retired no counted claims would push it toward $21,381.
MicroStrategy's discretionary choices also influence outcomes. The company recently sold 18.3 million MSTR shares for $2.0065 billion and spent $136.4 million repurchasing STRC shares. It added $300 million to its USD Reserve and placed the balance into USD Cash. The company did not sell Bitcoin.
MicroStrategy maintains $516.6 million of preferred repurchase authority and $1 billion for MSTR remaining, though neither program requires purchases. The $5.10 billion USD Reserve is designated by board policy for preferred dividends and debt interest.
Seniority and Timing Considerations
STRC cash dividends require declaration and legally available funds, though missed installments accumulate and compound. In an actual restructuring, creditors, subsidiary liabilities and STRF rank ahead of STRC, while junior preferred and MSTR common rank behind it.
Earlier pressure points include capital-market access, available cash and discretionary allocation decisions, each capable of shifting cost among MSTR holders, STRC holders and the Bitcoin reserve.
