CryptoQuant has said Strategy should pause further Bitcoin purchases and prioritize rebuilding cash reserves, arguing that rising preferred-stock dividend obligations and reduced liquidity have weakened confidence in the company’s capital structure.
The recommendation, published June 23 by CryptoQuant head of research Julio Moreno, comes as Strategy, formerly MicroStrategy, remains the world’s largest corporate holder of Bitcoin. The company has built its public-market identity around aggressive Bitcoin accumulation, using common stock, preferred stock and debt-linked securities to expand its balance-sheet exposure to the asset.
That strategy has helped Strategy grow its holdings to 847,363 BTC, but it has also increased scrutiny of the company’s funding model as Bitcoin prices and Strategy-linked securities have come under pressure. CryptoQuant’s concern centers on STRC, Strategy’s variable-rate preferred stock, which fell to $82.50 last week, a record 17.5% discount to its $100 par value.
Moreno said the decline reflected more than leveraged investor liquidations. He argued that the discount also pointed to deteriorating fundamentals around cash coverage and dividend obligations, particularly as Strategy continues to use capital markets to fund additional Bitcoin purchases. According to CryptoQuant, Strategy’s cash reserves have fallen 38% since the start of 2026. The company also recently repurchased $1.5 billion of its 0% convertible senior notes due in 2029, further reducing its available cash buffer.
Dividend Pressure Tests Strategy’s Bitcoin Model
The central issue is the speed at which Strategy’s preferred-stock obligations have grown. CryptoQuant said annualized dividend commitments have increased from about $300 million at the start of the year to roughly $1.2 billion, a nearly fourfold rise in less than six months.
That increase has reduced STRC dividend coverage from more than seven years at the beginning of 2026 to about 14 months, according to Moreno. He estimated that Strategy would need approximately $2.8 billion in cash reserves to restore 24 months of dividend coverage, roughly double its current level.
The analysis highlights a growing tension in Strategy’s capital structure. The company’s Bitcoin accumulation strategy depends heavily on continued market access and investor confidence in its equity and preferred securities. When those instruments trade under pressure, the cost of raising capital increases, making it harder for Strategy to continue buying Bitcoin without adding dilution or deepening concerns over dividend sustainability.
Strategy has already shown signs of moderating its approach. In its latest weekly disclosure, the company bought 520 BTC for about $34.9 million while also increasing its cash reserve by $300 million to $1.4 billion. Both moves were funded through common stock sales, underscoring the continued reliance on equity markets to support its Bitcoin and liquidity strategy.
Liquidity Becomes a Market-Credibility Test
CryptoQuant said selling Bitcoin to rebuild liquidity would be an unattractive option because Strategy is sitting on an estimated $10.6 billion in unrealized losses on coins acquired during 2024, 2025 and 2026. A forced sale, Moreno argued, would crystallize losses at scale and could damage shareholder value.
Instead, the firm said Strategy should pause Bitcoin purchases until cash reserves and dividend coverage are rebuilt. Moreno also recommended a more systematic, model-driven purchase framework, arguing that buying whenever capital is available has reinforced the market perception that Strategy accumulates near local cycle peaks.
The recommendation carries broader implications for corporate Bitcoin treasury strategies. Strategy remains the flagship public-company Bitcoin holder, and its model has influenced other firms considering digital-asset accumulation. But the pressure on STRC suggests Bitcoin-heavy balance sheets still require conventional liquidity management, especially when preferred dividends, investor confidence and capital-market access are central to the funding model.
For investors, Strategy’s risk profile is no longer defined only by Bitcoin price exposure. Its securities also reflect credit, dilution and liquidity risks tied to how the company finances its accumulation strategy. CryptoQuant’s recommendation signals that, at this stage of the cycle, rebuilding cash may be more important for Strategy’s market credibility than adding more Bitcoin.
