CryptoQuant said Strategy should stop buying bitcoin for now, rebuild its cash reserve, and become more disciplined about when it deploys capital. In a report shared Wednesday with CoinDesk, the onchain analytics firm said the pressure is already visible in STRC, the company’s flagship preferred stock.
STRC fell to about $82.50 last week, a record 17.5% below the $100 level it is structured to trade around. Preferred stock pays a fixed dividend, and STRC currently yields 11.5%. CryptoQuant said the drop came as bitcoin corrected while Strategy’s cash reserve was shrinking at the same time.
Cash reserve shrinks as dividend burden climbs
According to the report, Strategy’s U.S. dollar reserve has fallen 38% since the start of 2026, while its annual dividend obligations have nearly quadrupled to $1.2 billion. Dividend coverage, which measures how long reserves can fund payouts, has dropped from more than seven years to about 14 months.
A major factor was Strategy’s $1.5 billion buyback of convertible notes in May. Those notes can later convert into equity, and the repurchase drained cash that had acted as a buffer for STRC. At the same time, the company issued more STRC to fund bitcoin purchases, pushing annual dividend obligations from roughly $300 million at the start of 2026 to $1.2 billion now.
Reserve target stands far above current level
CryptoQuant estimated that STRC would need Strategy’s reserve to rise to about $2.8 billion, equal to 24 months of coverage, to stabilize. By comparison, the company reported only $1.1 billion in reserves in mid-June.
The firm also argued that Strategy’s bitcoin holdings offer less protection than their size may imply. CryptoQuant said the company is sitting on an unrealized loss of $10.6 billion, and that all bitcoin purchased in 2024, 2025, and 2026 is currently underwater. Any forced BTC sale at current prices, it said, would turn those paper losses into realized ones and damage shareholder value.
No immediate forced sale, but a pause is the preferred fix
CryptoQuant does not see a forced sale as likely in the near term. Strategy is not required to sell bitcoin to defend STRC and can instead raise the dividend or issue new shares to signal that payouts can continue. The report said the company is already using those options.
Its recommendation is direct: pause bitcoin purchases, rebuild reserves first, and then adopt a more systematic buying framework instead of purchasing BTC whenever new capital is raised. The report also noted that STRC dividends are cumulative, so skipped payments still have to be made later. CryptoQuant added that Strategy is unlikely to suspend them anyway, because that would hurt its credibility with the preferred shareholders it relies on.
The assessment was also more critical than the view released Tuesday by Benchmark-StoneX.