Michael Saylor's Strategy should pause bitcoin purchases and focus on rebuilding its cash reserves as dividend obligations have increased, cash reserves have fallen and unrealized bitcoin losses have mounted, according to onchain analytics firm CryptoQuant.
The recommendation comes as Strategy's preferred stock STRC fell to $82.50 last week, a record 17.5% below its $100 par value, after bitcoin bear market pressure coincided with a sharp decline in the company's cash reserves, Julio Moreno, head of research at CryptoQuant, said in a Tuesday report.
Moreno noted that Strategy recently repurchased $1.5 billion of its 0% convertible senior notes due in 2029, reducing the cash buffer available to support STRC dividends. At the same time, Strategy's cash reserves have fallen by 38% since the start of 2026.
Meanwhile, Strategy's dividend obligations have also increased sharply because the company issued more STRC to fund bitcoin purchases. Dividend obligations have increased from about $300 million annualized at the start of the year to roughly $1.2 billion today, a nearly fourfold increase in less than six months, Moreno noted.
As cash reserves fell and dividend obligations increased, Strategy's STRC dividend coverage has dropped from more than seven years at the start of the year to just 14 months, according to Moreno. At the current annual dividend burden of $1.2 billion, Moreno estimates Strategy would need about $2.8 billion in cash reserves to restore 24 months of dividend coverage, roughly double its current level. "A higher cash reserve is the most direct signal the market needs to regain confidence in STRC," Moreno said.
