Strategy Should Stop Buying Bitcoin and Restore Cash Reserves, CryptoQuant Suggests

TLDR:

• Strategy’s annualized dividend obligations have nearly quadrupled to $1.2 billion in 2026 alone.
• CryptoQuant says Strategy’s cash reserves have fallen 38%, leaving only 14 months of dividend coverage.
• STRC preferred stock hit a record 17.5% discount to par as Bitcoin losses and cash depletion converged.
• CryptoQuant recommends partial Bitcoin sales near cycle highs to deleverage and replenish cash reserves.

CryptoQuant is urging Strategy to halt its Bitcoin accumulation and focus on restoring financial stability. The on-chain analytics firm’s head of research, Julio Moreno, published findings showing that Strategy’s cash reserves have dropped 38% in 2026 while annualized dividend obligations have nearly quadrupled to $1.2 billion.

Dividend coverage has collapsed from over seven years to just 14 months, raising concerns about the company’s near-term financial footing.

CryptoQuant Flags Deteriorating Fundamentals Behind Strategy’s STRC

CryptoQuant’s analysis traces the pressure on Strategy’s balance sheet to two simultaneous developments. Dividend obligations tied to STRC preferred stock have surged from roughly $300 million at the start of the year to approximately $1.2 billion annualized.

At the same time, cash reserves have declined sharply, leaving the company with a much thinner financial cushion than it held just months ago.

A key contributor to the cash decline was Strategy’s May repurchase of $1.5 billion in 0% Convertible Senior Notes due 2029.

That transaction substantially reduced the buffer available to cover STRC dividends going forward. STRC fell to $82.50 last week, marking a record 17.5% discount to its $100 par value, as Bitcoin’s bear market correction and the cash drawdown converged.

Moreno’s report notes that Strategy sits on a $10.6 billion unrealized loss, with all Bitcoin purchased in 2024, 2025, and 2026 currently underwater.

Any forced sale at current prices would crystallize those losses and destroy shareholder value. CryptoQuant therefore considers a large-scale Bitcoin liquidation to defend STRC unlikely in the near term.

Instead, CryptoQuant argues the priority should be rebuilding cash to approximately $2.8 billion, equivalent to 24 months of dividend coverage.

Reaching that level, Moreno said, is a necessary condition for STRC to recover toward par value. Strategy can raise its dividend yield or issue MSTR stock in the meantime to signal continued payment capacity, and both tools are reportedly already being deployed.

CryptoQuant Recommends a Systematic Approach to Future Bitcoin Purchases

Beyond the immediate cash rebuild, CryptoQuant is calling on Strategy to overhaul how it approaches Bitcoin acquisition timing.

Moreno’s report argues that buying whenever capital becomes available, regardless of market conditions, has resulted in rapid unrealized loss growth and deteriorating STRC fundamentals. A model-driven framework, he suggested, would produce better long-term outcomes.

CryptoQuant founder Ki Young Ju reinforced this view, noting in a post that Strategy’s buying pattern resembles a liquidity sink more than a price catalyst.

He pointed out that Bitcoin’s realized cap grew by $467 billion over two years, yet price is essentially flat, down 1%, meaning capital inflows are largely facilitating exits rather than driving appreciation.

Ki Young Ju also argued that continuous buying may be preventing the market reset that Bitcoin cycles historically require.

Without a proper drawdown, weak hands remain in the market and strong hands have not rebuilt aggressive positions.

The result, he suggested, is a prolonged sideways range that lacks the capitulation needed to set up a stronger recovery.

CryptoQuant’s broader recommendation includes a disciplined selling framework for future bull markets. Moreno proposed that Strategy moderately sell portions of its Bitcoin holdings near cycle highs to realize gains, reduce leverage, and replenish cash reserves.

The firm framed this not as abandoning Bitcoin, but as fundamental risk management that would position Strategy more sustainably for the next accumulation cycle.

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