Michael Saylor’s Strategy Should Pause Bitcoin Buys; CryptoQuant

TLDR

• CryptoQuant said Strategy should pause Bitcoin purchases for now.
• Strategy’s annualized dividend obligations rose to about $1.2B in 2026.
• Strategy’s cash reserves have fallen 38% since the start of 2026.
• STRC fell to $82.50, about 17.5% below its $100 stated amount.
• CryptoQuant said Strategy needs about $2.8B in cash for 24 months of coverage.

CryptoQuant said Strategy should pause new Bitcoin purchases and rebuild its U.S. dollar cash reserve after rising preferred dividend obligations and falling liquidity pushed renewed attention toward the company’s STRC preferred stock.

The on-chain analytics firm said Strategy’s annualized dividend obligations have increased to about $1.2 billion in 2026, compared with roughly $300 million at the start of the year. At the same time, the company’s U.S. dollar reserve has fallen 38%, reducing the cash buffer available to support preferred dividends.

The warning followed a sharp decline in STRC, Strategy’s variable-rate preferred stock, which traded as low as $82.50 last week. That level placed the instrument about 17.5% below its $100 stated amount and raised new questions about dividend coverage, cash reserves and the company’s Bitcoin accumulation pace.

CryptoQuant Points to Lower Cash Coverage

Julio Moreno, CryptoQuant’s head of research, said STRC’s decline was partly linked to leveraged positions being liquidated, but added that the move also reflected weaker fundamentals. He said dividend cash coverage has fallen to its lowest level on record because Strategy’s cash reserve was depleted while annualized dividend obligations rose sharply.

Source: Cryptoquant

CryptoQuant estimated that STRC dividend coverage has dropped from more than seven years at the start of 2026 to about 14 months. The firm said Strategy would need roughly $2.8 billion in cash reserves to restore 24 months of coverage at the current annual dividend burden.

Strategy recently repurchased about $1.5 billion of its 0% convertible senior notes due in 2029. CryptoQuant said that reduced the company’s cash buffer at a time when dividend obligations had already grown because more STRC was issued to fund Bitcoin purchases.

Moreno said a higher cash reserve would be the clearest signal needed to rebuild market confidence in STRC. He also said Strategy should become more selective about Bitcoin purchase timing rather than buying whenever fresh capital is available.

Strategy Already Shifted More Capital to Cash

CryptoQuant’s recommendation came after Strategy had already slowed Bitcoin purchases and increased its cash reserve. In the week ending June 22, the company bought 520 BTC for about $35 million while raising $335.5 million through common stock sales.

During that same period, Strategy added about $300 million to its U.S. dollar reserve, lifting the reserve to $1.4 billion. A week earlier, the company bought 1,587 BTC but still directed a large portion of new capital toward cash rather than only Bitcoin.

The company has described the cash reserve as support for the credit quality of its preferred securities. That marks a more balanced approach compared with Strategy’s earlier pattern of directing nearly all raised capital into Bitcoin accumulation.

Bitcoin traded near $62,500 during the latest market session, keeping Strategy’s Bitcoin treasury below its average purchase price of about $75,000. CryptoQuant said the company currently carries an unrealized Bitcoin loss near $10.6 billion.

STRC Debate Splits Analysts and Bitcoin Supporters

CryptoQuant said selling Bitcoin to rebuild cash reserves would be a poor option because it would crystallize losses and damage shareholder value. The firm said Strategy has other tools, including issuing common stock or raising the STRC dividend rate, although neither provides an easy path back to par.

JAN3 CEO Samson Mow has argued that STRC has a self-repairing mechanism when it trades below $100. He said a lower market price raises the effective yield for buyers because the dividend is calculated against the $100 stated amount rather than the discounted trading price.

Mow also said below-par trading can create pull-to-par incentives for investors seeking both yield and capital gains. In his view, Strategy does not need to defend STRC like a stablecoin because the instrument is designed to trade freely based on market demand.

CryptoQuant’s position is more cautious. The firm said Strategy should pause Bitcoin purchases until cash reserves and dividend coverage improve, then use a model-based framework for future Bitcoin accumulation.

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