Key Takeaways
- Julio Moreno, CryptoQuant’s research director, recommends Strategy halt bitcoin acquisitions to replenish cash holdings
- The company’s STRC preferred shares dropped to $82.50, marking an unprecedented 17.5% discount to $100 par
- Available cash has declined 38% from early 2026 levels while yearly dividend commitments have quadrupled to $1.2 billion
- The company’s ability to cover dividends has plummeted from seven-plus years to merely 14 months
- Strategy faces approximately $10.6 billion in unrealized bitcoin losses, making liquidation highly detrimental to shareholders
Strategy confronts a critical challenge that extends beyond cryptocurrency market volatility.
Julio Moreno, CryptoQuant’s research director, released an analysis Tuesday recommending Strategy immediately suspend bitcoin acquisitions and prioritize strengthening its cash position. This recommendation comes as STRC preferred shares reached an all-time low of $82.50 last week — trading 17.5% beneath their $100 par value.
Moreno’s argument centers on a simple premise: the organization’s dividend commitments are escalating rapidly while available cash dwindles.
Strategy’s yearly dividend expenses have exploded from approximately $300 million in early 2026 to roughly $1.2 billion currently. This represents nearly a 400% increase in less than half a year, fueled by additional STRC issuances to finance bitcoin accumulation.
Meanwhile, liquid capital has decreased 38% since the beginning of the year. The company also bought back $1.5 billion worth of its zero-coupon convertible senior notes maturing in 2029, further depleting its cash reserves.
The outcome: dividend coverage capacity has crashed from over seven years at 2026’s start to a mere 14 months today.
Caught in a Liquidity Squeeze
Moreno calculates that Strategy requires approximately $2.8 billion in cash reserves to reestablish a more sustainable 24-month dividend coverage buffer — essentially double its current holdings.
Liquidating bitcoin holdings to achieve this target presents significant complications. Strategy carries an aggregate unrealized loss on its bitcoin portfolio totaling roughly $10.6 billion. Every bitcoin acquisition made throughout 2024, 2025, and 2026 remains below purchase price.
“Any forced Bitcoin sale at current prices would crystallize these losses at scale and destroy shareholder value,” Moreno wrote.
The company finds itself trapped: selling bitcoin would lock in massive losses, yet continuing to issue preferred stock without adequate cash backing creates mounting risk.
STRC dividends accumulate over time, meaning payment suspension doesn’t eliminate the obligation — it merely postpones it. Moreno believes suspension remains improbable due to reputational damage concerns.
Moreno’s Prescription for Recovery
Beyond halting acquisitions temporarily, Moreno proposed two additional strategic shifts. He advocates for Strategy to implement a systematic, model-based methodology for timing bitcoin purchases instead of acquiring whenever capital becomes available.
“‘Strategy always buys the local top’ has become a genuine market meme,” he wrote.
He additionally recommends establishing a formal framework for liquidating bitcoin portions during future market rallies — an action the company has never executed meaningfully — to capture profits and rebuild cash reserves.
JPMorgan researchers raised comparable concerns this month following Strategy’s sale of 32 bitcoin, a transaction that “spooked” investors despite its minimal scale.
Strategy retains options including raising its 11.5% STRC dividend rate or issuing additional MSTR common stock to demonstrate dividend-paying capacity. Moreno recognizes both mechanisms are currently deployed but cautions: “the path back to $100 is not straightforward.”
