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CryptoQuant said Strategy should temporarily stop buying Bitcoin and focus on rebuilding its cash reserves.
The Block reported on June 23 that Julio Moreno, CryptoQuant’s head of research, wrote in a report that Strategy should halt Bitcoin purchases for now and prioritize restoring its cash holdings and stabilizing STRC dividends. With cash and cash equivalents declining and dividend obligations rising rapidly, market concerns about the company’s financial health are growing.
Moreno said Strategy’s cash holdings have fallen about 38% this year. The company also recently redeemed $1.5 billion of convertible notes due in 2029 ahead of schedule, leaving it with a smaller cash buffer to support STRC dividends.
Meanwhile, increased STRC issuance to fund Bitcoin purchases has lifted annual dividend obligations to about $1.2 billion from roughly $300 million at the start of the year, nearly a fourfold increase. As a result, STRC dividend coverage has fallen sharply from more than seven years to about 14 months.
Moreno estimated that Strategy needs about $2.8 billion in cash reserves to restore confidence among STRC investors. Expanding cash holdings is the signal the market most needs, he wrote.
He also said selling Bitcoin would not be an appropriate way to raise cash. Strategy is currently sitting on about $10.6 billion in unrealized losses on its Bitcoin holdings, and most of the Bitcoin it bought between 2024 and 2026 is now at a loss.
Selling Bitcoin at current prices would lock in heavy losses and could undermine shareholder value, Moreno added. He said the company should adopt a more systematic Bitcoin buying strategy that reflects market conditions and establish a capital management framework that allows it to take partial profits in bull markets.