CryptoQuant Suggests Pausing Bitcoin Purchases
CryptoQuant, a cryptocurrency research firm, recently released a report recommending that Strategy, the company led by Michael Saylor, should halt its ongoing Bitcoin purchases and instead prioritize rebuilding its cash reserves. The recommendation is based on multiple financial pressures including rising dividend obligations, declining cash reserves, and expanding unrealized losses on its Bitcoin holdings. The report was authored by CryptoQuant's head of research, Julio Moreno, who specifically highlighted that Strategy's preferred stock STRC has reached its largest discount in history.
Cash Reserves and Dividend Pressure Intensify
According to the report, STRC fell to $82.50 last week, a 17.5% discount from its $100 par value, marking the largest discount ever recorded. Moreno attributed the pressure to the bearish Bitcoin market environment and a significant weakening of the company's cash buffer. Data shows that Strategy's cash reserves have dropped 38% since the beginning of 2026. Meanwhile, the company recently repurchased $1.5 billion of its 0% convertible senior notes due in 2029, a move that further reduced the cash buffer available to support STRC dividend payments.
Regarding dividend obligations, as Strategy issued more STRC to fund Bitcoin purchases, its annualized dividend obligation has surged from approximately $300 million at the start of this year to about $1.2 billion currently—a nearly fourfold increase in less than six months. CryptoQuant believes that under growing cash pressure, the company should not continue indiscriminately increasing its Bitcoin holdings but rather improve selectivity in purchases and prioritize the sustainability of its cash reserves.