Analyst Urges Strategy to Focus on Cash Reserves
Julio Moreno, a researcher at CryptoQuant, has advised Strategy to cease its Bitcoin acquisitions and prioritize boosting cash reserves, as the company's financial health deteriorates. Stretch (STRC) has hit an all-time low, with its preferred stock falling to $79.85, while Bitcoin also experienced a 4% drop, reaching $59,175 before a slight recovery.
Moreno highlighted that the firm's dwindling cash reserves are exacerbating the decline of STRC, which has struggled to maintain its value above the $100 par. He suggested that Strategy should rebuild its USD Reserve to ensure at least 24 months of dividend coverage. Currently, the company's dividend obligations have surged almost fourfold since early 2026, creating significant financial pressure.
Despite analysts predicting an increase in the STRC dividend to stabilize its price, Moreno cautioned that insufficient cash reserves could impede recovery efforts. He noted that cash reserves have decreased significantly after the company opted to repurchase part of its convertible debt, pushing dividend coverage down from over seven years at the beginning of 2026 to just 14 months today.
