CryptoQuant Highlights Gaps in Bitcoin Strategy

CryptoQuant analysts have characterized the recent adjustments to the Strategy capital management program as a move towards mitigating liquidity risks. However, they highlighted the absence of defined guidelines for the acquisition and sale of Bitcoin, the leading cryptocurrency.

Just six days after our advisory, the Strategy shifted its approach.

Recent actions taken include:

• Halting Bitcoin acquisitions
• Increasing USD reserves from $1.44 billion to $3 billion
• Doubling dividend coverage from approximately 14 to 29 months
• Raising STRC dividends to 12%
• Liquidating $466.7 million in MSTR shares and approximately 3,588 BTC… pic.twitter.com/O3XKuV4URo— CryptoQuant.com (@cryptoquant_com) July 16, 2026

“The Strategy program represents a significant course correction. To fully realize this turnaround, they need to establish a systematic model for timing Bitcoin purchases and a disciplined selling strategy in a rising market. Improvement is still needed,” stated Julio Moreno, head of research at CryptoQuant.

The firm had introduced a comprehensive five-part plan at the end of June, which consists of:

• Creating a dollar reserve dedicated to dividends on preferred shares and debt interest, with at least 12 months of payment coverage;
• Raising the annual dividend on STRC preferred shares to 12%, with monthly assessments;
• Conducting a buyback of preferred shares up to $1 billion, focusing on STRC;
• Implementing a buyback of common MSTR shares up to $1 billion if deemed undervalued;
• Launching a Bitcoin monetization initiative to sell coins worth up to $1.25 billion to bolster reserves, dividends, and buybacks.

This plan was introduced shortly after CryptoQuant suggested pausing Bitcoin purchases and rebuilding dollar reserves following a notable decline in STRC dividend coverage.

Moreno reported that the first goal of the Strategy has been largely achieved, with the company selling approximately 3,588 BTC for around $216 million and raising $466.7 million through MSTR shares from June 29 to July 5.

The dollar reserve has now increased to $3 billion, while dividend coverage has improved from 14 to 29 months. The Bitcoin reserve remains stable at 843,775 BTC, but buybacks of preferred and common shares have yet to occur.

Moreno also noted the performance of STRC shares, which rose from about $75 at the end of June to around $85 post-program launch and dividend increase, but still fall short of the nominal value of $100.

Nonetheless, two critical questions remain unresolved:

1. When will Bitcoin purchases resume? The current share issuance rule at the 1x mNAV mark governs capital raising, not its allocation. Without a valuation model, the company risks purchasing at unfavorable peaks again.
2. How will cryptocurrency be sold in the next market upswing? The existing monetization approach is primarily defensive and does not facilitate partial realizations or hedging during market peaks. Moreno remarked that a more disciplined sales strategy is vital for effective capital management.

In early July, JPMorgan analysts criticized the Strategy's decision to sell Bitcoin, arguing that it introduced a “two-sided risk that could have been avoided” for the market.