CryptoQuant Urges Strategy to Pause Bitcoin Buys, Rebuild Cash

CryptoQuant, an on-chain analytics firm, urged Strategy to halt new bitcoin purchases and rebuild cash reserves in a Tuesday report by Julio Moreno, the firm’s head of research. CryptoQuant flagged a 38% drop in cash since early 2026 and said annualized dividend obligations have risen to about $1.2 billion. Strategy’s preferred stock, STRC, traded at $82.50 last week, roughly 17.5% below its $100 par value.

Moreno noted Strategy repurchased $1.5 billion of zero-percent convertible senior notes due 2029, which reduced the company’s available cash. He linked the cash decline to the company’s use of preferred stock issuance to fund additional bitcoin purchases and to weaker bitcoin prices.

Dividend obligations climbed from about $300 million annualized at the start of the year to roughly $1.2 billion, CryptoQuant calculated. That increase cut STRC’s dividend coverage from more than seven years at the start of 2026 to about 14 months. At the current payout level, CryptoQuant estimates Strategy would need roughly $2.8 billion in cash to restore two years of dividend coverage, about twice the company’s present holdings. “A higher cash reserve is the most direct signal the market needs to regain confidence in STRC,” Moreno wrote.

CryptoQuant calculated an aggregate unrealized bitcoin loss of about $10.6 billion, with bitcoin purchased in 2024, 2025 and 2026 currently underwater. Moreno wrote that selling bitcoin to rebuild cash would “crystallize these losses at scale and destroy shareholder value.” He added that Strategy is not obliged to sell bitcoin to support STRC and can instead raise STRC yield or issue common stock; both tools are already being used, he added, but noted a return to $100 par would be difficult.

The report recommended pausing new bitcoin purchases until cash reserves and dividend coverage are rebuilt, adopting a systematic, model-driven approach to purchase timing to avoid repeatedly buying at cycle peaks, and establishing a framework to sell portions of holdings during future bull runs to realize gains, reduce leverage and build cash reserves for downturns. Moreno wrote that “‘Strategy always buys the local top' has become a genuine market meme.”

Separately, JPMorgan analysts advised rebuilding dollar reserves after Strategy sold 32 bitcoin earlier this month, a sale the bank described as unsettling to markets despite being largely symbolic. Pressure on STRC, lower cash balances and larger dividend commitments were cited by CryptoQuant as reasons for recommending more conservative capital management.