CryptoQuant Warns Strategy to Pause Bitcoin Buys as STRC Faces Pressure and Cash Coverage Drops

Rising Concerns Over Strategy's Financial Position

Recent analysis from on-chain data firm CryptoQuant has drawn attention to challenges in Strategy's balance sheet management. The company, known for its substantial Bitcoin holdings under Michael Saylor's leadership, faces scrutiny over its cash reserves and obligations tied to its STRC preferred stock.

According to the report, Strategy's annualized dividend commitments linked to STRC have increased nearly fourfold since the start of 2026, reaching approximately $1.2 billion. At the same time, cash reserves have decreased by 38 percent. This shift has reduced dividend coverage from more than seven years to roughly 14 months.

STRC Preferred Stock Under Strain

Strategy's STRC shares, which carry an 11.5% yield and were issued to help fund Bitcoin acquisitions, have traded significantly below their $100 par value. The stock recently reached a low of $82.50, representing a discount of about 17.5%. This decline reflects investor concerns about the company's liquidity and ability to meet ongoing dividend payments.

CryptoQuant's head of research, Julio Moreno, noted that rebuilding cash reserves to around $2.8 billion would be needed to restore a more comfortable 24-month dividend coverage level. This would provide a stronger signal to the market regarding the sustainability of STRC.

Bitcoin Holdings and Acquisition Strategy

The analysis points out that Strategy's Bitcoin positions acquired in recent years carry substantial unrealized losses totaling around $10.6 billion. As a result, selling Bitcoin to address liquidity issues is viewed as undesirable, as it would realize those losses and potentially harm shareholder value.

Instead, the recommendation focuses on pausing additional Bitcoin purchases in the near term. This would allow the company to prioritize cash reserve rebuilding. Moreno suggested developing a more systematic and disciplined framework for future acquisitions rather than buying whenever capital becomes available.

CryptoQuant CEO Ki Young Ju echoed similar views, stating that current buying patterns may act more as a liquidity sink than a catalyst for price movement in the present market environment.

Recent Company Actions and Market Context

In its latest reported activity, Strategy acquired additional Bitcoin while simultaneously increasing its USD cash reserves by $300 million to $1.4 billion. This dual approach indicates some attention to liquidity management alongside its core accumulation strategy.

The broader market has seen Bitcoin trading in a range-bound period, adding to the pressures on leveraged corporate treasury models. STRC's performance and the associated dividend mechanics have become focal points for evaluating the long-term viability of such strategies.

Broader Implications for Corporate Bitcoin Strategies

This discussion highlights the balance required between aggressive asset accumulation and maintaining sufficient liquidity buffers. As companies integrate large Bitcoin holdings into their treasury operations, metrics such as cash coverage ratios and preferred stock performance gain increased importance from market participants.

Strategy continues to hold a significant position as a major public Bitcoin treasury operator. The ongoing developments around its financial structure and responses to analyst feedback will likely remain areas of close observation in the sector.