Key Takeaways
- Julio Moreno from CryptoQuant recommends Strategy halt bitcoin acquisitions and prioritize restoring cash reserves
- STRC preferred shares plummeted to $82.50, marking a historic 17.5% discount to $100 par value
- The company’s cash position has eroded 38% since early 2026 as yearly dividend commitments quadrupled to $1.2 billion
- Coverage for dividend payments has deteriorated from more than seven years down to merely 14 months
- Strategy carries approximately $10.6 billion in unrealized bitcoin losses, making asset liquidation problematic for investors
Strategy confronts a mounting challenge that extends beyond bitcoin’s market volatility.
Julio Moreno, CryptoQuant’s research chief, released an analysis Tuesday recommending Strategy cease bitcoin accumulation and concentrate on strengthening its financial reserves. This warning arrives as the company’s STRC preferred shares touched an all-time low of $82.50 recently ā trading 17.5% beneath the $100 par designation.
Moreno’s argument is direct: dividend commitments are escalating rapidly as the cash buffer diminishes.
The firm’s yearly dividend liability has expanded from approximately $300 million in early 2026 to roughly $1.2 billion presently. This represents nearly quadruple growth in less than half a year, fueled by additional STRC issuances to finance bitcoin acquisitions.
Meanwhile, available cash has contracted 38% since the year began. Strategy additionally bought back $1.5 billion worth of its zero-coupon convertible senior notes maturing in 2029, further depleting the financial cushion.
The outcome: dividend sustainability has plunged from exceeding seven years at 2026’s start to a mere 14 months currently.
The Liquidity Dilemma
Moreno calculates Strategy requires approximately $2.8 billion in reserves to achieve a more sustainable 24-month dividend coverage threshold ā essentially twice its present holdings.
Liquidating bitcoin holdings to achieve this target presents significant complications. The company holds unrealized bitcoin losses totaling around $10.6 billion. Every bitcoin acquisition made throughout 2024, 2025, and 2026 remains below purchase price.
“Any forced Bitcoin sale at current prices would crystallize these losses at scale and destroy shareholder value,” Moreno wrote.
The company faces a dilemma: liquidating bitcoin proves costly, yet continuing preferred stock offerings without adequate cash backing creates vulnerability.
STRC dividends accumulate, meaning suspension doesn’t eliminate the obligation ā payments simply defer. Moreno believes suspension remains improbable due to reputational damage.
Moreno’s Recommended Strategy
Beyond suspending acquisitions, Moreno proposed two additional measures. He advocates Strategy adopt a data-driven methodology for timing bitcoin purchases instead of buying whenever capital becomes accessible.
“‘Strategy always buys the local top’ has become a genuine market meme,” he wrote.
He further recommends establishing protocols for selling bitcoin portions during future market peaks ā an action the company hasn’t executed at meaningful scale ā to realize profits and replenish reserves.
JPMorgan researchers highlighted comparable issues this month following Strategy’s 32 bitcoin sale, a transaction that “spooked” investors notwithstanding its minimal scale.
Strategy retains options including raising its 11.5% STRC dividend rate or issuing MSTR common stock to demonstrate dividend sustainability. Moreno recognizes both mechanisms are currently deployed but noted: “the path back to $100 is not straightforward.”
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