CryptoQuant Advises Strategy to Halt Bitcoin Purchases Amid STRC Financial Strain

Onchain analytics firm CryptoQuant has advised Michael Saylor’s Strategy to stop buying Bitcoin, citing severe financial pressure on the company’s perpetual preferred stock, Stretch (STRC). The warning comes as the Bitcoin bear market leaves all BTC purchased between 2024 and 2026 underwater, with unrealized losses of $10.6 billion.

STRC, which offers an 11.5% yield and is designed to trade at $100, fell to a record low of $82.5 last week—17.5% below par. At a current price of $87.4, the effective yield has risen to 13.2%. CryptoQuant highlighted that Strategy’s annual dividend obligations have nearly quadrupled to $1.2 billion, while its cash reserve has declined 38% since early 2026, dropping to roughly $1.4 billion after a $1.5 billion convertible senior note repurchase in May.

Dividend coverage has collapsed from over seven years to just 14 months. The firm noted that restoring 24 months of coverage would require approximately $2.8 billion in cash—roughly double what Strategy currently holds.

The rapid growth of dividend obligations from STRC issuance, which had been an effective capital-raising mechanism for Bitcoin purchases, now poses a structural liability. CryptoQuant warned that any forced Bitcoin sale at current prices would crystallize the unrealized losses, destroy shareholder value, and potentially trigger further downside for Bitcoin spot markets.

“The market appears to be pricing this risk,” the firm stated, noting that the STRC price decline reflects both near-term cash reserve weakness and long-term concerns about servicing the dividend burden.

Despite the warnings, Saylor remains committed to buying Bitcoin. Strategy recently purchased 520 BTC for $35 million while increasing its USD reserve by $300 million to $1.4 billion on Monday. This move provided brief support, lifting STRC to $88 on Tuesday, but the stock remains below par. Company stock (MSTR) fell another 5% on Tuesday to $103.84, its lowest since early 2024. Bitcoin itself dipped to $62,000 on Tuesday before recovering to $63,000, but has since fallen back. CryptoQuant recommends a pause in Bitcoin purchases until cash reserves and dividend coverage are restored.

Source: https://cryptopotato.com/saylor-should-stop-buying-bitcoin-says-cryptoquant/