On-chain data company CryptoQuant stated that Strategy may have gone too far with its bitcoin purchases and stated that the company should pause new purchases before re-strengthening its cash reserves. According to the report, while the pressure on the company’s STRC coded privileged stock increases, high dividend liabilities and decreasing dollar reserves draw attention.
STRC decline seen as warning sign
In CryptoQuant’s evaluation shared with CoinDesk dated Wednesday, it was stated that the way Strategy finances its bitcoin accumulation now indicates a more fragile structure. The company’s flagship STRC stock fell to about $82.50 last week. This level corresponds to approximately 17.5 percent below the $100 nominal value around which the stock is targeted to be traded.
STRC stands out as a class of preferred shares that pay fixed dividends and its current yield is 11.5 percent. CryptoQuant stated that the coincidence of the correction in the price of bitcoin and the contraction in the company’s cash buffer made this pressure evident.
CryptoQuant argued that Strategy should stop buying bitcoins, rebuild its cash reserves first, and then adopt a more systematic timing discipline instead of buying every time it raises capital.
Cash reserve decreased to 14-month dividend coverage
According to the data in the report, Strategy’s US dollar reserves have decreased by 38 percent since the beginning of 2026. During the same period, annual dividend liabilities increased approximately fourfold to 1.2 billion dollars. Thus, the coverage ratio, which shows how long reserves can cover dividend payments, dropped from levels exceeding seven years to approximately 14 months.
CryptoQuant stated that one of the main reasons for this weakening was that the company spent $1.5 billion to buy back its convertible bonds in May. The move significantly thinned the cash buffer supporting STRC. Additionally, the annual dividend burden grew rapidly as the company issued more STRCs to fund bitcoin purchases.
Mini glossary: A convertible bond is a debt instrument that can be converted into company shares under certain conditions. Preferred stock is a type of equity that generally offers fixed dividend priority but carries different rights than ordinary shares.
The target is a $2.8 billion buffer, according to CryptoQuant
CryptoQuant calculated that for STRC to achieve a more stable outlook, reserves would need to reach approximately $2.8 billion, or 24 months of dividend coverage. In comparison, Strategy reported reserves of $1.1 billion as of mid-June. This picture indicated that despite the size of approximately 847 thousand bitcoins in the company’s possession, its short-term support capacity may not be as strong as expected.
While Strategy operates in the field of business intelligence software, it has come to the fore with its bitcoin-focused balance sheet strategy in recent years. The company’s Chairman, Michael Saylor, has long placed uninterrupted bitcoin accumulation at the center of its corporate identity.
Forced sale does not seem imminent
However, the report rates a forced bitcoin sale as unlikely in the near term. Strategy has no obligation to sell bitcoin directly to defend STRC. Options such as the company increasing its dividend rate or selling new shares remain on the table.
CryptoQuant also emphasized that dividend payments cannot simply be stopped. Because STRC’s dividends are cumulative; The missed payment has to be made again later. According to the report, such a suspension decision could also damage the investor confidence that the company needs.
The assessment offered a harsher tone than the more moderate commentary from Benchmark analyst Mark Palmer on Tuesday. Palmer rejected the analogies between STRC and Terra’s collapsed stablecoin structure and argued that the company’s financing mechanism was not broken, but its efficiency had decreased.
