Strategy faces about $1.5 billion in annual preferred-stock dividends against roughly $477 million in software revenue, a cash-flow gap that Grayscale’s head of research, Zach Pandl, warns is a financing problem, not a bitcoin one.
In a podcast with journalist Laura Shin, Grayscale’s head of research (who posts on X as LowBeta) argued that Strategy’s preferred-equity obligations are best understood “as a cash flow issue, not a crypto issue,” adding:
His distinction is important to note, given Strategy has marketed itself as a pure bitcoin proxy. But the bills it now owes are denominated in dollars and due on a schedule, regardless of where BTC trades.
The numbers are stark as well. Strategy faces roughly $1.5 billion in annual dividend obligations across its preferred-stock instruments, including STRC, its variable-rate “Stretch” preferred that carries an annual rate near 11.5%, and STRK, which pays 8%. Against that, its software business generated about $477 million in revenue in 2025, meaning dividend obligations outrun revenue by more than three to one.
The company’s cash position offers limited cover, with Strategy’s roughly $1 billion cash hoard covering less than a year of those payments. And the preferred stack itself has ballooned, swelling from around $730 million in early 2025 to roughly $15.5 billion by mid-2026. This growth, some analysts warn, could feed a “death spiral” if the company keeps issuing new shares to pay dividends on old ones.
