Key Takeaways
- CryptoQuant researcher Julio Moreno recommends Strategy halt bitcoin acquisitions and prioritize cash reserve restoration
- The company’s STRC preferred shares dropped to $82.50, hitting a historic 17.5% discount to their $100 par value
- Available cash has declined 38% year-to-date in 2026 while yearly dividend commitments have surged nearly four times to $1.2 billion
- The company’s dividend runway has contracted dramatically from over seven years to merely 14 months
- Moreno cautions that Strategy holds approximately $10.6 billion in paper losses on bitcoin, making liquidation harmful to investors
Strategy is confronting a serious challenge, and bitcoin’s volatility isn’t the only culprit.
Julio Moreno, CryptoQuant’s head of research, released an analysis Tuesday recommending that Strategy halt bitcoin acquisitions and concentrate on strengthening its liquidity position. The research comes as STRC, the company’s preferred equity instrument, reached a historic bottom of $82.50 last week — trading 17.5% beneath its $100 face value.
Moreno’s argument is clear: the firm’s dividend commitments are escalating rapidly while available liquidity continues declining.
Strategy’s yearly dividend liability has expanded from approximately $300 million in early 2026 to about $1.2 billion currently. That represents an almost fourfold increase within six months, fueled by additional STRC issuances to finance bitcoin accumulation.
Meanwhile, liquid assets have decreased 38% since January. Strategy additionally bought back $1.5 billion of its zero-coupon convertible senior notes maturing in 2029, further depleting available cash.
The outcome: dividend coverage has deteriorated from more than seven years in early 2026 to only 14 months presently.
The Liquidity Dilemma
Moreno calculates Strategy requires approximately $2.8 billion in liquid reserves to achieve a more sustainable 24-month dividend coverage ratio — about twice its current holdings.
Liquidating bitcoin to reach that threshold presents complications. Strategy currently holds aggregate unrealized losses on bitcoin totaling approximately $10.6 billion. Every bitcoin acquired 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 faces a bind: liquidating bitcoin isn’t viable, yet continuing preferred stock issuance without adequate cash backing creates vulnerability.
STRC dividends accumulate, meaning suspension doesn’t eliminate the obligation — it merely defers payment. Moreno believes suspension remains improbable given the credibility damage it would inflict.
Moreno’s Proposed Solutions
Along with freezing acquisitions, Moreno presented two additional suggestions. He advocates for Strategy to implement a systematic, model-based approach to timing bitcoin purchases rather than buying opportunistically whenever capital becomes available.
“‘Strategy always buys the local top’ has become a genuine market meme,” he wrote.
He further recommends the company establish a systematic framework for liquidating bitcoin portions during future bull cycles — something Strategy has never executed meaningfully — to realize profits and replenish cash reserves.
JPMorgan analysts raised comparable concerns this month following Strategy’s sale of 32 bitcoin, a transaction that “spooked” markets despite its minimal scale.
Strategy retains options including raising its 11.5% STRC dividend rate or issuing common MSTR shares to demonstrate dividend-paying capacity. Moreno recognizes both mechanisms are already being utilized but cautioned: “the path back to $100 is not straightforward.”
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