On-chain data and market analysis company CryptoQuant argued that Strategy, led by Michael Saylor, should temporarily pause its Bitcoin purchases and focus on replenishing its dwindling cash reserves. A report published by the company’s research director, Julio Moreno, stated that increasing dividend obligations, a declining cash position, and growing unrealized Bitcoin losses pose risks for investors.
According to the report, Strategy’s preferred stock, STRC, fell to $82.50 last week, dropping 17.5 percent below its nominal value of $100. Moreno stated that this decline was due to the bear market pressure on Bitcoin coupled with a sharp drop in the company’s cash reserves.
The analysis highlighted that Strategy recently repurchased $1.5 billion worth of its 2029-maturity, zero-interest convertible bonds, reducing its cash buffer that could be used to support dividend payments. It noted that the company’s cash reserves have declined by approximately 38 percent since the beginning of 2026.
On the other hand, it was noted that Strategy’s annual dividend obligations increased rapidly due to the issuance of more STRC to finance its Bitcoin purchases. The annual dividend obligation, which was approximately $300 million at the beginning of the year, has now reached $1.2 billion, growing nearly fourfold in less than six months.
According to Moreno, the company’s dividend-paying capacity has also weakened significantly. While it had cash reserves covering more than seven years at the beginning of the year, this period has now shrunk to just 14 months. It is estimated that Strategy needs to increase its cash reserves to approximately $2.8 billion to sustain the current dividend burden.
CryptoQuant also stated that selling Bitcoin at current price levels would not be a wise choice for the company. According to the report, Strategy has approximately $10.6 billion in unrealized losses on its Bitcoin positions, and all purchases made in 2024, 2025, and 2026 are currently in the loss zone.
Moreno suggested that, in order to regain investor confidence, the company should first halt Bitcoin purchases, develop a more systematic buying strategy, and create a framework to strengthen its cash reserves by realizing profits in future bull markets. These steps are considered to enhance Strategy’s long-term financial resilience.
*This is not investment advice.
