CryptoQuant to Saylor: Put the Credit Card Down, Michael — Strategy's STRC Cushion Just Sprang a Leak 🛑

Strategy should immediately stop buying bitcoin ($BTC) and rebuild its dwindling cash reserve before resuming any systematic accumulation, onchain analytics firm CryptoQuant said in a Wednesday report. The recommendation came as the firm's flagship STRC preferred stock slid to a record low of $79.85, with bitcoin trading at $62,662.58, down to $59,175 intraday at one point, according to CoinGecko data.

CryptoQuant's data shows the cash buffer behind STRC's 11.5% dividend has thinned dramatically. Annual dividend obligations have nearly quadrupled to $1.2 billion from about $300 million at the start of 2026, while the U.S. dollar reserve has fallen 38% year-to-date. Dividend coverage, the measure of how long reserves could fund payouts, has collapsed from more than seven years to roughly 14 months, a squeeze exacerbated by $1.5 billion spent in May to repurchase convertible notes. "The company sits on a $10.6 billion unrealized loss, with all Bitcoin purchased in 2024, 2025, and 2026 underwater," CryptoQuant said. "Any forced BTC sale at current prices would crystallize large losses and destroy shareholder value."

Strategy (MSTR) reported a $1.1 billion reserve in mid-June, though coffers have since recovered to about $1.4 billion after a $300 million boost from selling $335.5 million in MSTR shares. CryptoQuant estimates the reserve needs to reach approximately $2.8 billion, or 24 months of coverage, for STRC to recover. STRC traded at about $82.50 last week, 17.5% below its $100 par value, and dropped further to $79.85 on Wednesday, per Yahoo Finance.

"They should pause Bitcoin purchases, rebuild cash reserves, and adopt a systematic framework for purchase timing," CryptoQuant CEO Ki Young Ju wrote on X, adding that the firm should also create a "disciplined selling framework" for the next bull market. CryptoQuant's Head of Research, Julio Moreno, noted that analysts expect Strategy to hike STRC's nominal dividend for an eighth time to lure buyers back, though he argued the higher cash reserve is "the most direct signal the market needs to regain confidence in STRC." Strategy separately said on Monday it plans to "continue replenishing" its USD reserve to "support the credit quality of its Digital Credit securities."