Strategy urged to halt Bitcoin buys as cash reserve shrinks 38%

CryptoQuant says Strategy's cash cushion has thinned from seven years of dividend coverage to just 14 months.

Strategy's cash reserve has fallen 38% since January to $1.4 billion, pushing dividend coverage below 14 months as annual obligations quadrupled to $1.2 billion. The company's preferred stock STRC slid to a record low of $82.50 last week, a 17.5% discount to its $100 par value.

"The company's strategic priority should be to pause Bitcoin purchases and rebuild its cash reserve," Julio Moreno, head of research at CryptoQuant, said in a June 23 report.

Strategy holds about $10.6 billion in unrealized Bitcoin losses, with its average acquisition cost near $75,000 — well above Bitcoin's spot price of $62,534, down 2.5% on the day. The company's cash position contracted partly because of a $1.5 billion buyback of its 0% convertible notes due 2029, which further depleted available liquidity. At the start of 2026, dividend coverage exceeded seven years; it now stands at roughly 14 months, according to CryptoQuant's calculations.

CryptoQuant estimates Strategy needs about $2.8 billion in cash — roughly double its current holdings — to restore a 24-month coverage buffer. The company has already begun shifting priorities, routing $300 million of a $335.5 million common stock sale to its reserve in the week of June 22 rather than to Bitcoin. In that week, it bought just 520 Bitcoin for about $35 million, a sharp slowdown from prior purchasing pace.

The STRC Problem

STRC, the variable-rate preferred stock that Strategy markets as a stable instrument near $100, has become the focal point of investor concern. Its decline to $82.50 represents a 17.5% discount to par, the widest since issuance. The 11.5% dividend yield now compensates holders for what Moreno described as deteriorating credit quality rather than the steady income the product was designed to deliver.

Selling Bitcoin to refill the reserve would crystallize losses at scale, Moreno argued, given that every Bitcoin acquisition made throughout 2024, 2025 and 2026 remains below cost basis. Strategy retains other options: it can raise the dividend further or issue more MSTR common stock, levers it has already pulled. The question, Moreno said, is whether the company can rebuild its cash buffer fast enough to steady STRC before the discount widens further.

The next weekly purchase update will show whether Strategy maintains its new posture of prioritizing cash over Bitcoin — a shift that began before CryptoQuant's warning and marks a departure from the company's long-standing buy-only pledge.

This article is for informational purposes only and does not constitute investment advice.