CryptoQuant recommends that Strategy stop Bitcoin purchases and rebuild cash reserves due to financial strain affecting STRC's dividend coverage.
Analysts from CryptoQuant are recommending that Strategy cease its Bitcoin purchases and focus on rejuvenating its cash reserves in US dollars. This advice follows a notable drop in dividend coverage for STRC, which has significantly impacted the firm's financial standing.
Overstretched: Strategy Needs To Stop Buying Bitcoin, Rebuild Its Cash Reserve, And Get More Strategic About Timing
— Julio Moreno (@jjcmoreno) June 23, 2026
According to Julio Moreno, head of research at CryptoQuant, the decline of STRC below the $100 mark is chiefly due to weakening fundamentals at Strategy rather than solely from leveraged position liquidations.
Dwindling Reserves Amid Rising Obligations
Since the start of 2026, Strategy has seen its cash reserves decrease by 38%, while annual dividend obligations have surged from approximately $300 million to $1.2 billion. The current yield on STRC stands at 11.5%, and the duration of reserve coverage for dividends has plummeted from over seven years to just about 14 months.
CryptoQuant notes that a significant financial setback occurred in May 2026, when Strategy allocated $1.5 billion to repurchase convertible bonds, substantially limiting its available liquidity for dividend payments.
Last week, STRC's value fell to around $82.50, representing a 17.5% decrease from its nominal price of $100.
Bitcoin Liquidation Risks
Moreno warns that selling off Bitcoin assets to quickly restore liquidity could severely harm shareholder value, as Strategy is currently facing an unrealized loss of $10.6 billion on its cryptocurrency holdings. The company possesses 847,363 BTC, with all purchases since 2024 showing losses.
Nevertheless, CryptoQuant believes a forced liquidation of crypto assets is improbable, as Strategy is not required to sell Bitcoin for STRC support and has alternative financial tools available to manage its obligations.
Strategic Recommendations from CryptoQuant
For STRC to achieve a more stable position, analysts suggest that cash reserves need to rise to about $2.8 billion, sufficient to cover dividends for the next two years. As of mid-June, the firm reported cash reserves of only $1.1 billion.
CryptoQuant emphasizes the importance of pausing Bitcoin purchases and focusing on building cash reserves. Following this, they recommend a more strategic approach to future acquisitions, avoiding repetitive increases in Bitcoin holdings each time capital is raised.
Importantly, analysts highlighted that STRC's dividends are cumulative, meaning delayed payments will need to be resolved later, making it unlikely that Strategy would suspend dividend distributions.
