CryptoQuant indicates that the financial buffer supporting Strategy's STRC has diminished from seven years to just 14 months, resulting in a $10.6 billion unrealized loss due to purchasing BTC at market peaks.
By Shaurya Malwa|Edited by Jamie Crawley Jun 24, 2026, 8:15 a.m. 3 min readMake preferred on ShareShare this articleCopy linkX (Twitter)LinkedInFacebookEmailMake preferred on SummaryShow- CryptoQuant cautions that Strategy has overstretched itself by aggressively acquiring bitcoin, recommending that the company pause its purchases and restore its dwindling cash reserves.
- The value of the firm’s STRC preferred stock has declined by approximately 17.5% from its $100 par value, as dividend obligations have surged nearly fourfold to $1.2 billion while cash reserves have decreased by 38% this year.
- According to CryptoQuant, the coverage for Strategy’s dividends has plummeted from over seven years to around 14 months and suggests that reserves should be rebuilt to approximately $2.8 billion before resuming bitcoin purchases.
CryptoQuant has recommended that Strategy (MSTR) cease its bitcoin acquisition of BTC$62,706.18, rebuild its cash reserves, and adopt a more strategic approach to purchasing, as detailed in a report shared with CoinDesk.
The difficulties reflected in the company's STRC preferred stock indicate that it has overextended its financial capacity. STRC, which is Strategy's primary preferred stock, dropped to around $82.50 last week, representing a significant 17.5% decrease from its intended trading range of $100.
Preferred stocks typically provide a fixed dividend, and STRC currently has a yield of 11.5%. This decline coincided with both a downturn in bitcoin prices and a reduction in cash reserves.
Concerns center around the cash backing these dividends. CryptoQuant reported that Strategy's cash reserves in U.S. dollars have fallen by 38% since the beginning of 2026, while its annual dividend commitments have nearly quadrupled to $1.2 billion.
The coverage ratio for dividends, which indicates how long the cash reserves can sustain payouts, has dropped from over seven years to approximately 14 months. A significant factor in this decline was Strategy's $1.5 billion expenditure in May for repurchasing its convertible notes, which are debts convertible into equity, thereby depleting the financial buffer supporting STRC.
The financial stress is exacerbated from both sides. As Strategy issued more STRC to finance bitcoin purchases, its annual dividend obligations surged from about $300 million at the start of 2026 to $1.2 billion now, marking a nearly fourfold increase in less than six months.
CryptoQuant indicated that the reserve needs to be increased to around $2.8 billion, or 24 months of coverage, for STRC to recover. Currently, Strategy reported a $1.1 billion reserve as of mid-June.
Thus, the bitcoin holdings do not provide as much security as their total suggests.
"The company is facing a $10.6 billion unrealized loss, with all bitcoin acquired in 2024, 2025, and 2026 currently in the red," stated CryptoQuant. "Any compelled sale of BTC at current market prices would realize significant losses and diminish shareholder value."
A forced sale is not anticipated in the near future, as Strategy is not obligated to liquidate its bitcoin holdings to support STRC and may opt instead to increase dividends or issue new shares to demonstrate its ability to maintain payouts, strategies already in use.
CryptoQuant suggests that Strategy should first pause bitcoin acquisitions, restore its cash reserves, and then implement a more disciplined approach to timing purchases rather than buying whenever it raises funds.
Strategy cannot simply halt dividend payments to conserve cash. Since STRC dividends are cumulative, any missed payments must be compensated later, and CryptoQuant believes the company is unlikely to suspend dividends, as doing so would harm its credibility with the preferred stockholders it relies on.
The analysis from CryptoQuant presents a more critical perspective than the one provided by Benchmark-StoneX earlier this week.
Benchmark analyst Mark Palmer dismissed comparisons between STRC and the collapsed Terra stablecoin, asserting that the company’s funding model has simply become "less efficient" rather than fundamentally broken.
Implementing CryptoQuant's recommendations would signify a substantial shift in Strategy's operational approach.
The company has been consistently acquiring bitcoin, amassing a total of around 847,000 coins, and Michael Saylor has made this relentless acquisition a core aspect of its identity. While pausing to rebuild cash reserves could stabilize STRC, it would also interrupt the buying strategy that has characterized the company.
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CEX Volumes Drop to Lowest Since September 2024 as RWA Perps Hit Record High
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In May, combined exchange volumes fell 3.45% to $4.41T; the lowest since September 2024. RWA perpetual futures volumes rose 10.4% against the trend, hitting a new all-time high.
By CoinDesk ResearchJun 15, 2026In May, combined exchange volumes fell 3.45% to $4.41T; the lowest since September 2024. RWA perpetual futures volumes rose 10.4% against the trend, hitting a new all-time high.
Why it matters:
In May, combined exchange volumes fell 3.45% to $4.41T; the lowest since September 2024. RWA perpetual futures volumes rose 10.4% against the trend, hitting a new all-time high.
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