Strategy’s Net Leverage Falls Near Zero on $6.69 Billion Dollar Buffer

Strategy has cut its net leverage to almost zero after building $6.69 billion in dollar liquidity, nearly matching the roughly $6.75 billion in convertible debt still on its balance sheet. Strategy stock (MSTR) traded at $122.48 while Bitcoin traded at $78,064.27.

Dollar Reserve Now Covers Years of Preferred Dividends

Strategy calculates net leverage by subtracting its dollar assets from its outstanding debt, then dividing the result by the value of its Bitcoin reserve, currently worth approximately $66 billion. With dollar assets nearly offsetting debt, the calculation now produces a figure close to zero.

The company’s U.S. dollar reserve, which supports approximately $1.7 billion in annual preferred-stock dividend payments, has grown to $5.1 billion. 

That amount covers roughly four years of dividend obligations at the current payment rate. Strategy also built a separate $1.59 billion cash pool intended for more flexible deployment across the business.

Executive Chairman Michael Saylor described the cash pool’s purpose in a Friday post on X, saying the dollar holdings support the company’s broader Digital Credit Capital Framework. He added that they are designated for uses including Bitcoin acquisitions, preferred dividend and interest payments, share repurchases, convertible note repayments and continued growth of the dollar reserve.

STRC Preferred Stock Recovers Toward Par Value

Strategy’s variable-rate perpetual preferred stock, STRC, has rallied more than 35% from its June low and now trades at $97.23, still below its $100 par value. The recovery has tracked two developments: Bitcoin’s rebound toward $80,000 and Strategy’s ongoing share repurchases of STRC.

STRC ranks below Strategy’s convertible debt in the company’s capital structure, meaning bondholders are repaid before preferred shareholders in the event of financial distress. 

That subordination is part of why Strategy’s debt levels matter directly to STRC’s price, and why continued buybacks and dollar liquidity are viewed as more immediate levers for supporting the preferred stock than eliminating the debt outright.

Rival Treasury Company Offers a Debt-Free Comparison

Strive Asset Management, a competing Bitcoin treasury company, carries no debt after eliminating its liabilities earlier this year. 

Strive’s own perpetual preferred stock, SATA, has returned to its $100 par value, a position that allowed the company to issue additional shares through its at-the-market program last week.

The contrast between the two companies illustrates how capital structure affects a preferred stock’s trading price. Strive’s debt-free structure removes the subordination risk that continues to weigh on Strategy’s STRC, even as Strategy’s dollar liquidity has expanded substantially in recent months.

Debt Reduction Remains a Slower Path Than Liquidity Building

Strategy took a direct step toward reducing its debt burden in May, repurchasing $1.5 billion of convertible notes due in 2029. Eliminating debt entirely would strengthen STRC’s position within the capital structure by removing the senior claim ahead of it, mirroring Strive’s current setup.

For now, Strategy appears to be leaning more heavily on building dollar liquidity and continuing STRC buybacks than on further debt elimination. Bitcoin’s price recovery toward $80,000 has provided additional support for STRC’s climb toward par, a dynamic that would reverse if Bitcoin’s price were to pull back significantly from current levels.

Whether Strategy pursues further debt repurchases, continues prioritizing dollar reserve growth, or shifts back toward Bitcoin accumulation will likely depend on how STRC’s price and Bitcoin’s market value evolve in the coming months.