CryptoQuant has warned that Michael Saylor’s Strategy may need to temporarily stop purchasing Bitcoin as concerns grow over its declining cash reserves and mounting preferred-stock dividend obligations.
The warning follows a sharp decline in Strategy’s STRC preferred shares, which recently fell to a record low. According to the analysis, rebuilding liquidity could be necessary to stabilize STRC and restore investor confidence.
Strategy’s STRC Shares Fall to Record Low
Strategy’s STRC preferred stock dropped to approximately $82.50 last week, significantly below its $100 par value and its lowest level since launch.
The decline has increased concerns about the company’s ability to meet its growing dividend commitments. These worries intensified after a proposal related to more frequent dividend payments was approved.
CryptoQuant Head of Research Julio Moreno argued that Strategy’s shrinking cash position has placed additional pressure on its financial flexibility.
Dividend Obligations Rise as Cash Reserves Decline
According to CryptoQuant’s analysis, Strategy’s annualized STRC-related commitments have nearly quadrupled since the beginning of 2026, reaching approximately $1.2 billion.
During the same period, the company’s cash reserves declined by around 38%. A major factor behind this reduction was Strategy’s $1.5 billion repurchase of zero-percent convertible senior notes due in 2029.
The decline in available cash has weakened the company’s ability to comfortably cover its preferred-stock dividends.
Moreno estimated that Strategy would need approximately $2.8 billion in cash to restore two years of dividend coverage. He argued that increasing cash reserves would provide the clearest signal that the company can meet its obligations.
Suspending STRC Dividends Could Hurt Confidence
Strategy technically has the option to suspend STRC dividend payments. However, Moreno believes such a decision would be unlikely and potentially damaging.
The dividends are cumulative, meaning any missed payments would still need to be settled later. A suspension could therefore delay the obligation rather than eliminate it.
It could also further weaken investor confidence in STRC and place additional pressure on the preferred shares.
Selling Bitcoin Is Not Considered a Practical Solution
CryptoQuant rejected the idea that Strategy should sell part of its Bitcoin holdings to improve liquidity.
According to Moreno, the company currently holds approximately $10.6 billion in unrealized losses on its Bitcoin position. Selling BTC at current prices could turn those paper losses into permanent losses and damage shareholder value.
Instead, Strategy could consider increasing STRC’s current yield of approximately 11.5% or issuing additional MSTR shares to raise capital.
The company has already taken measures intended to reassure investors and strengthen its financial position.
CryptoQuant Recommends a Pause in Bitcoin Buying
Moreno ultimately advised Strategy to temporarily suspend further Bitcoin purchases and prioritize rebuilding its U.S. dollar reserves.
He also called for the company to adopt a more disciplined framework for future acquisitions rather than purchasing Bitcoin whenever new capital becomes available.
According to the analyst, continuously buying BTC without considering market cycles could increase the risk of accumulating the asset near major price peaks.
Strategy Adds $300 Million to Cash Reserves
Strategy recently appeared to move partially in this direction.
On Monday, June 22, the company purchased approximately $35 million worth of Bitcoin. However, it also increased its cash reserves by $300 million, bringing its total cash position to around $1.4 billion.
The move suggests that Strategy is attempting to balance its long-term Bitcoin accumulation strategy with the need to improve liquidity and meet its rising financial obligations.
