CryptoQuant, an onchain analytics firm, has urged Strategy to halt its aggressive bitcoin purchases and rebuild depleted cash reserves, warning that the company has overextended itself funding dividend obligations on its preferred stock.
The analysis, shared with CoinDesk on June 24, finds that Strategy’s U.S. dollar reserves have declined 38 percent since the start of 2026, while annual dividend obligations on its STRC preferred stock have quadrupled to $1.2 billion from $300 million. The shift has compressed dividend coverage from seven years to just 14 months, according to CryptoQuant.
Strategy reported $1.1 billion in reserves in mid-June, well below the $2.8 billion CryptoQuant estimates is needed to stabilize the STRC program. The company holds approximately 847,000 bitcoin but sits on a $10.6 billion unrealized loss across its holdings.
“The company sits on a $10.6 billion unrealized loss, with all Bitcoin purchased in 2024, 2025, and 2026 underwater,” CryptoQuant stated in its report. “Any forced BTC sale at current prices would crystallize large losses and destroy shareholder value.”
The pressure on STRC has intensified after bitcoin’s recent correction. The preferred stock has fallen 17.5 percent below its $100 par level, trading at $82.50 last week with an 11.5 percent dividend yield. Strategy issued additional STRC to fund bitcoin purchases, a capital-raising mechanism that expanded dividend liabilities faster than cash inflows could sustain.
In May, Strategy spent $1.5 billion to buy back convertible notes, a transaction that did not increase its bitcoin holdings but further strained liquidity. CryptoQuant recommends halting new bitcoin acquisitions until cash reserves recover.
Mark Palmer, an analyst at Benchmark-StoneX, offered a more measured assessment. Palmer rejected comparisons between STRC and Terra’s collapsed stablecoin, characterizing Strategy’s funding engine as “less efficient” rather than fundamentally broken. He did not dispute CryptoQuant’s core findings on reserve depletion.
Strategy is not required to sell bitcoin to defend STRC. The company could instead raise dividends, issue new shares, or pursue other capital-raising mechanisms. STRC dividends are cumulative, meaning any skipped payments must be made up later, creating additional future obligations if the company cannot sustain current payout levels.
Michael Saylor has made relentless bitcoin accumulation the centerpiece of Strategy’s corporate identity and investor pitch. The company has bought bitcoin almost continuously, building its stash to approximately 847,000 coins. Strategy has not publicly responded to CryptoQuant’s recommendation to halt purchases.
