Analysis of the financial statements shows that Strategy's (formerly MicroStrategy) reserve capital has reached a level where the company now ranks second in this metric among all financial organizations included in the S&P 500 index. Only Warren Buffett's legendary Berkshire Hathaway surpasses it.
This claim is based on the company's own calculation methodology, which its management, including Michael Saylor, actively promotes. However, under a more conservative approach reflected in the official investor presentation, the total reserve amount looks more modest — around $15 billion.
How Strategy achieved this result
The foundation of this success is a colossal stockpile of bitcoins. The company holds 845,050 BTC on its balance sheet. The first major purchase was made back in August 2020, when 21,454 coins were acquired for $250 million. Today, the value of this package is estimated at approximately $65.2 billion. Notably, purchases resumed on August 31 after a ten-week pause: the company added 4,603 BTC worth about $370 million.
If the value of the cryptocurrency portfolio is combined with $6.7 billion in dollar-denominated assets, the total reserve volume reaches an impressive $72.3 billion. This figure aligns with estimates published by CEO Phong Le.
It is important to note that Strategy effectively has no net leverage. Dollar-denominated assets of $6.714 billion are almost entirely offset by debt of a comparable size. This means the company does not use borrowed funds to expand its cryptocurrency position, which reduces risks associated with market volatility.
A metric with a twist
However, these figures should be treated with a certain degree of skepticism. The Total Reserve Capital metric, which Strategy loves to showcase, does not account for senior claims — that is, obligations that are repaid first. For banks, such claims are deposits, which is why JPMorgan's figure goes deep into negative territory — approximately -$1.35 trillion.
On Strategy's chart, this metric stands at $66 billion, but it is achieved only after excluding preferred shares from the calculation. If they are included, the ratio of reserves to senior obligations drops from 10.75 to a more modest 3.4. The company itself honestly calls this metric "supplementary, with significant caveats."
For comparison: Berkshire Hathaway had $365.5 billion in cash and Treasury bonds at the end of June — a verifiable figure that raises no questions.
My view: Saylor's strategy has turned MicroStrategy into a unique instrument — effectively a bitcoin exchange-traded fund with aggressive capital management. However, investors need to understand the difference between marketing metrics and real financial stability. So far, the model works, but its main risk lies not in leverage, but in extreme concentration on a single asset.