Strategy should halt Bitcoin purchases to restore market confidence, CryptoQuant says

The company that made “buy Bitcoin” its entire corporate identity is being told to stop buying Bitcoin. A CryptoQuant report published on June 23 recommends that Strategy, the rebranded MicroStrategy, temporarily halt its Bitcoin acquisitions and focus instead on rebuilding cash reserves that have eroded by 38% this year.

The reasoning is straightforward: Strategy’s dividend obligations have quadrupled, its preferred stock is trading at a steep discount, and the company is sitting on roughly $10.6 billion in unrealized losses from Bitcoin purchased between 2024 and 2026.

The math behind the pause

The company’s annualized dividend commitments have ballooned from approximately $300 million at the start of 2026 to $1.2 billion, driven largely by its issuance of STRC perpetual preferred stock. That’s a fourfold increase in fixed obligations in roughly six months.

CryptoQuant chief analyst Julio Moreno argues that Strategy should target building cash reserves to approximately $2.8 billion. That figure would provide coverage for roughly 24 months of dividend payments at the current rate.

Strategy’s cash flow coverage for dividends has collapsed from over seven years to just 14 months.

Meanwhile, STRC preferred stock has been trading at $82.50, a 17.5% discount to its $100 par value.

The scale of Strategy’s Bitcoin bet

Strategy holds more than 840,000 Bitcoin, which represents over 4% of the total Bitcoin supply that will ever exist. The approximately $10.6 billion in aggregate unrealized losses across its 2024-2026 purchases illustrate the risk embedded in this approach. The 38% year-to-date decline in cash reserves adds another layer of concern. Strategy has been funding Bitcoin purchases while its obligations have grown, creating a squeeze that CryptoQuant believes is now actively undermining investor confidence rather than building it.

What this means for investors

As the holder of more than 4% of all Bitcoin, Strategy’s buying and selling behavior has a gravitational pull on the broader market. If the company actually pauses its purchases, that removes one of the most reliable sources of institutional demand from the market.

CryptoQuant isn’t telling Strategy to abandon Bitcoin. It’s arguing that by shoring up its balance sheet and demonstrating that it can comfortably meet $1.2 billion in annual dividend payments, the company could actually strengthen the investment case for both its equity and its Bitcoin holdings.

If cash reserves continue to decline while dividend obligations remain fixed at $1.2 billion annually, Strategy could eventually face a scenario where it needs to sell Bitcoin to meet those obligations.

For investors holding STRC preferred stock, the 17.5% discount to par is already pricing in meaningful credit risk. Whether that discount narrows or widens will depend largely on whether Strategy prioritizes liquidity over accumulation in the coming quarters.

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