On-chain analytics platform CryptoQuant has cautioned that Strategy’s recent Bitcoin accumulations may have gone too far, urging the company to pause further acquisitions until it has strengthened its cash reserves. In its latest report, CryptoQuant highlighted mounting pressure on the company’s STRC preferred shares, driven by high dividend obligations and a shrinking reserve of US dollars.
Drop in STRC signals red flag
In an assessment shared with CoinDesk on Wednesday, CryptoQuant stated that Strategy’s method of financing its Bitcoin holdings is showing signs of growing fragility. The company’s flagship STRC shares fell to approximately $82.50 last week, around 17.5% below their $100 par value, the targeted price at which the shares are designed to trade.
STRC is a preferred share class that pays a fixed dividend, currently yielding about 11.5%. CryptoQuant pointed out that the recent decline in Bitcoin’s price coincided with a contraction in Strategy’s cash buffer, intensifying financial pressures on the firm.
According to CryptoQuant, Strategy should halt further Bitcoin buys and focus on rebuilding its cash reserves first, then adopt a more disciplined approach to timing any future acquisitions, instead of making purchases every time new capital is raised.
Cash reserves now cover only 14 months of dividends
The report indicated that since the start of 2026, Strategy’s US dollar reserves have dropped by 38%, while its annual dividend obligations have surged nearly fourfold to $1.2 billion. This has caused the coverage period—how long reserves can sustain dividend payouts—to shrink from over seven years to just 14 months.
A key factor in this decline, according to CryptoQuant, was the company’s $1.5 billion buyback of convertible bonds in May, which significantly depleted the cash buffer underpinning STRC. Furthermore, as Strategy continues to finance new Bitcoin purchases by issuing additional STRC shares, its annual dividend burden has sharply increased.
Glossary: A convertible bond is a debt instrument that can be exchanged for company shares under certain conditions. Preferred shares typically grant fixed dividend priority but differ from regular shares in other rights and characteristics.
CryptoQuant sets $2.8 billion cash buffer as target
CryptoQuant estimates that for STRC to appear financially stable, reserves should reach around $2.8 billion, equivalent to 24 months of dividend coverage. As of mid-June, however, Strategy’s reserves stood at just $1.1 billion. This suggests that despite holding approximately 847,000 Bitcoin, the company may not be as resilient in backing its obligations as previously assumed.
While Strategy originally operated in business intelligence software, its sustained focus on a Bitcoin-centered treasury strategy has brought it into the spotlight. Executive Chairman Michael Saylor has positioned persistent Bitcoin accumulation as a core part of the firm’s identity.
Forced asset sales unlikely in the near term
Despite these pressures, the report sees a forced Bitcoin sale by Strategy as unlikely in the short term. There is no direct requirement to sell Bitcoin to support STRC shares; the company could, instead, consider raising its dividend rate or issuing new shares as alternative options.
CryptoQuant emphasized that suspending dividend payments is not a simple option, as STRC dividends are cumulative—skipped payouts must be made up later. The report also warned that such a move could undermine investor confidence, which is vital for the company.
CryptoQuant’s much starker assessment contrasts with Tuesday’s comment from Benchmark analyst Mark Palmer, who dismissed direct comparisons between STRC and Terra’s collapsed stablecoin structure, noting that while Strategy’s financing mechanism has weakened, it has not broken down.
