CryptoQuant has advised Michael Saylor to halt further Bitcoin purchases and focus on rebuilding Strategy’s cash reserves, citing growing financial pressure on the company.
According to the analytics firm, Strategy’s perpetual preferred stock, Stretch (STRC), is facing significant strain from two major challenges. First, the ongoing Bitcoin downturn has pushed all BTC acquired between 2024 and 2026 into unrealized losses totaling $10.6 billion. Second, the company’s cash reserves have fallen sharply, dropping 38 percent since early 2026 after a $1.5 billion convertible senior note buyback in May.
Strategy currently pays dividends on its Stretch product, which offers an 11.5 percent yield and was designed to trade at $100. However, the stock recently dropped to a record low of $82.50, marking a steep discount to its intended value. At its current trading price of $87.40, the effective yield has climbed to 13.2 percent.
CryptoQuant noted that Strategy’s biggest challenge lies in its rapidly growing dividend obligations. Annual dividend commitments have surged to $1.2 billion, nearly four times higher than before, while available cash has continued to shrink. As a result, dividend coverage has fallen dramatically from more than seven years to just 14 months.
Although Strategy recently claimed it has 32 years of dividend coverage backed by its $55 billion Bitcoin holdings, CryptoQuant argued that this assessment overlooks liquidity concerns. The firm estimates that Strategy would need around $2.8 billion in cash reserves to restore just 24 months of dividend coverage, roughly double its current holdings.
While STRC issuance has helped raise capital for Bitcoin purchases, CryptoQuant warned that growing dividend obligations are turning into a structural burden that could threaten long term sustainability.
The firm believes the market is already reacting to this risk. The decline in STRC’s price reflects not only concerns about weakened cash reserves but also growing doubts about Strategy’s ability to meet rising dividend commitments over time.
CryptoQuant also warned that if Strategy is forced to sell Bitcoin at current prices, it would lock in massive unrealized losses, reduce shareholder value, and potentially trigger further downside pressure in the broader Bitcoin market.
As a result, the firm recommends that Strategy pause additional Bitcoin purchases until it strengthens its cash position and improves dividend coverage.
Despite these concerns, Saylor appears committed to his Bitcoin strategy. Strategy recently purchased 520 BTC for $35 million while increasing its cash reserves by $300 million, bringing total USD reserves to $1.4 billion.
The latest move offered some short term relief for STRC, which recovered slightly to $88 on Tuesday, though it still trades below par.
Meanwhile, Strategy’s common stock, MSTR, continues to struggle. Shares fell another 5 percent on Tuesday, closing at $103.84, their lowest level since early 2024.
The decline came alongside fresh weakness in Bitcoin’s price. BTC failed to hold above $64,000 and dropped to $62,000 on Tuesday. Although the asset briefly recovered above $63,000 during Wednesday’s Asian trading session, it had already started slipping again at the time of writing.#crypto#cryptonews https://coinsignals.net https://t.me/coinsignalpublic
