CryptoQuant warns of a $10.6 billion hole and calls for a halt on buying #bitcoin in #strategy
The analysis firm CryptoQuant has officially recommended that Strategy stop its ongoing buys of #BTC in order to rebuild its cash reserves and adopt a much stricter buying discipline.
Multimillion-dollar unrealized losses: Due to acquiring Bitcoin during the peaks of the cycles in 2024, 2025, and 2026, the company is sitting on a theoretical unrealized loss of $10.6 billion, keeping their recent buys in the red.
Critical collapse of the dividend cushion: The financial backing to pay dividends on their preferred shares (STRC) has severely plummeted, dropping from over seven years of coverage at the beginning of 2026 to just 14 months currently. This level is well below the 24 months that CryptoQuant considers the safe threshold to restore confidence.
Preferred shares at historic lows: STRC, designed to trade near $100, took a record dive last week down to $82.50 (17.5% below target) due to over-leverage and Bitcoin correction. Currently, the market shows it's trading around $84.66 with a downward trend today.
Financial obligations quadrupled: By massively issuing STRC shares to finance the purchase of more cryptocurrencies, the company's annual dividend commitments skyrocketed from $300 million to $1.2 billion in less than six months, while their cash reserves in USD dropped by 38% since the start of the year.
Liquidity drain from debt buyback: One of the main reasons behind the loss of the financial cushion was the $1.5 billion spent in May to buy back their own convertible bonds.
Latent danger, but no imminent liquidation: While a forced sell-off of their Bitcoin at current prices would wreck shareholder value by realizing losses, CryptoQuant notes that this is unlikely in the short term, as the company can ease the pressure by issuing new shares or increasing dividends.
Radical shift in corporate identity: Taking a pause to prioritize cash would stabilize STRC shares, but would force a halt to the relentless accumulation strategy that defines Michael Saylor's identity, who already commands a reserve of approximately 847,000 Bitcoin coins.
