Key Takeaways
- Julio Moreno from CryptoQuant recommends Strategy halt bitcoin acquisitions to restore cash position
- STRC preferred shares dropped to $82.50, marking an unprecedented 17.5% discount to $100 par value
- Available cash has declined 38% since January 2026 while annual dividend commitments have quadrupled to $1.2 billion
- Company’s dividend coverage window has contracted from seven-plus years to merely 14 months
- Strategy holds approximately $10.6 billion in unrealized losses on bitcoin holdings, making liquidation extremely costly
Strategy confronts a mounting crisis 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 liquidity position. The warning comes as STRC, the company’s preferred equity instrument, plunged to an all-time low of $82.50 last week — trading at a substantial 17.5% discount to its $100 stated value.
Moreno’s argument centers on a troubling divergence: escalating dividend commitments alongside evaporating cash reserves.
The firm’s annual dividend liability has surged from approximately $300 million in early 2026 to nearly $1.2 billion presently. This represents a nearly four-times increase within six months, fueled by continuous STRC issuances to finance additional bitcoin accumulation.
Concurrently, available cash has contracted 38% since the beginning of the year. Strategy also deployed $1.5 billion to repurchase its 0% convertible senior notes maturing in 2029, further depleting liquid resources.
The outcome: dividend coverage capability has plummeted from over seven years at 2026’s start to a mere 14 months currently.
A Liquidity Bind
Moreno calculates Strategy requires approximately $2.8 billion in cash holdings to reestablish a more sustainable 24-month dividend coverage buffer — essentially twice its present reserves.
Liquidating bitcoin to address this shortfall presents severe complications. Strategy currently faces aggregate unrealized losses of roughly $10.6 billion on its bitcoin position. Every purchase made throughout 2024, 2025, and 2026 trades below acquisition cost.
“Any forced Bitcoin sale at current prices would crystallize these losses at scale and destroy shareholder value,” Moreno stated.
The company finds itself in a bind: disposing of bitcoin would trigger massive realized losses, yet continuing preferred stock issuances without adequate cash backing creates increasing vulnerability.
STRC dividends carry cumulative features, meaning suspended payments accumulate as future obligations. Moreno believes outright suspension remains improbable given the reputational damage it would inflict.
Moreno’s Prescription for Strategy
Beyond halting purchases temporarily, Moreno presented two additional strategic recommendations. He advocates Strategy establish a systematic, data-driven framework for timing bitcoin acquisitions rather than deploying capital opportunistically.
“‘Strategy always buys the local top’ has become a genuine market meme,” he noted.
He further suggests the company formulate a structured approach for divesting bitcoin portions during future bull cycles — an action Strategy has historically avoided — to realize profits and replenish liquidity.
JPMorgan analysts raised comparable concerns earlier 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 sustainability. Moreno recognizes these mechanisms remain available but cautioned: “the path back to $100 is not straightforward.”
