CryptoQuant warns Michael Saylor’s Strategy to halt Bitcoin buys as cash reserves plunge 38%

Crypto analytics firm CryptoQuant  suggests Michael Saylor’s company Strategy (formerly MicroStrategy) take a break from accumulating Bitcoin and direct resources toward rebuilding its cash buffer.

CryptoQuant has raised concerns over Strategy, warning that the firm may need to slow or temporarily halt its aggressive Bitcoin accumulation strategy as its cash reserves have reportedly fallen by about 38%, tightening financial flexibility amid ongoing market volatility.

According to the Crypto analytics firm’s latest assessment, Strategy’s liquidity position has weakened as the company continues to prioritize Bitcoin purchases alongside debt servicing and dividend obligations tied to its expanding capital structure.

The report suggests that the firm’s shrinking cash buffer could force a reassessment of its “buy-and-hold forever” Bitcoin strategy if market conditions remain under pressure.

The cautionary note comes as the company’s STRC preferred shares have fallen to all-time lows while cash reserves continue to tighten. Its preferred stock is now trading over 17% below face value, and investors are earning only about a 13% yield.

According to CryptoQuant’s head of research, Julio Moreno, these concerns are being amplified by a weakening cash position. He noted that a $1.5 billion repurchase of 0% convertible senior notes maturing in 2029 has constrained Strategy’s liquidity for STRC dividends, compounded by a 38% drop in cash reserves since early 2026. 

Strategy’s dividend obligations rose to $1.2 billion

Strategy’s approval of the twice-a-month dividend proposal has only heightened investor fears about the company’s payout capacity. Moreno also contended that Strategy’s appetite for Bitcoin and commitment to STRC issuance have practically quadrupled its annual dividend obligations, from $300 million to $1.2 billion, in just six months. 

On X, CryptoQuant warned: “Dividend coverage collapsed from 7+ years to just 14 months. The company needs to stop buying Bitcoin and rebuild cash.”

In response to the research company’s post, one user questioned how Strategy could possibly rebuild cash without issuing more securities. Another commenter stated that a revenue slump could force the company to cut dividends or sell Bitcoin. 

Moreno noted that Michael Saylor’s company will need roughly $2.8 billion in cash to normalize its dividend coverage over the next two years. He asserted, “A higher cash reserve is the most direct signal the market needs to regain confidence in STRC.”  he also stated that the company still has the option to pause STRC dividends. However, he believes that doing so would probably hurt investor confidence, as missed payments would continue to accumulate.

Additionally, he explained that selling Bitcoin to stock up on cash isn’t viable right now, because Strategy is down $10.6 billion on paper, meaning any forced sale today would lock in massive losses and crush shareholder value.

Rather than selling Bitcoin, Strategy can support STRC through dividend adjustments and additional MSTR share offerings, he said. Nevertheless, he warned that reclaiming the $100 mark will be difficult. 

Moreno asks Strategy to come up with a proper BTC buying formula

Moreno has advised the company to suspend further Bitcoin purchases until its liquidity position and dividend support improve.

He also said the company should rely on a model-based framework to determine the best timing for future Bitcoin acquisitions. He commented, “Buying whenever capital is available is not a strategy — it is a formula for accumulating at cycle peaks.”

Moreover, he asked the firm to introduce a profit-taking model for future Bitcoin rallies to manage leverage, improve liquidity, and create funds for buying opportunities during market weakness. 

Earlier, JPMorgan stated that Strategy must replenish its fiat cash buffer to ease investor anxieties triggered by a minor, symbolic sale of 32 Bitcoin. 

Are Bitcoin’s buy orders surpassing the sell orders?

Meanwhile, Bitcoin’s order book imbalance has risen sharply, hitting its highest level since February 2024, based on Glassnode’s analysis.

The mismatch shows that buy orders are piling up much faster than sell orders, meaning buyers are back and happily snapping up any coins hitting the market.

The shift toward stronger buying pressure coincides with Bitcoin’s rebound from sub-$60,000 levels. Still, investors are waiting to see if the move develops into a broader bull trend. 

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