STRC Flashes More Warning Signs as CryptoQuant Tells Strategy to Stop Buying Bitcoin

Key highlights:

• CryptoQuant says Michael Saylor's firm should stop its BTC purchases for now.
• The firm highlighted that Strategy's annual dividend obligations have increased greatly.
• This comes as STRC crashed to $82.

Strategy and its STRC preferred stock are still trading underwater as CryptoQuant tells Michael Saylor’s firm that it may need to slow down its consistent Bitcoin buying regime.

The warning comes as the preferred stock fell to a record low of $82.50. This is well below its $100 price tag. The decline has since raised concerns about the company's capacity to meet its dividend obligations while still buying BTC.

CryptoQuant raises concerns over Strategy's cash reserves

In a new research note, CryptoQuant Head of Research Julio Moreno said that the treasury firm’s financial flexibility is becoming limited as its cash reserves continue to shrink.

The company’s annualized dividend commitments for STRC have jumped from around $300 million at the start of 2026 to $1.2 billion today. Also, Strategy’s cash reserves have now fallen by about 38%.

A major reason for this decline was the company’s decision to spend $1.5 billion in repurchasing its 0% Convertible Senior Notes due in 2029.

This led to the firm’s dividend coverage dropping significantly. Moreno also noted that the company had more than seven years of dividend coverage at the start of the year. However, today, that number has fallen to just 14 months.

To restore parity, Moreno projected that Strategy would need around $2.8 billion in cash reserves to achieve two years of dividend coverage.

"A higher cash reserve is the most direct signal the market needs to regain confidence in STRC," he said.

Why selling Bitcoin may not be the answer

Before now, some experts have suggested that Strategy could sell Bitcoin to raise cash. Moreno, on the other hand, believes that would create even bigger problems.

According to the analysis, the company is sitting on about $10.6 billion in unrealized losses across BTC purchased during 2024, 2025, and 2026. Selling these holdings now would confirm its massive losses and potentially damage shareholder value.

Source: CryptoQuant

"Any forced Bitcoin sale at current prices would crystallize these losses at scale and destroy shareholder value," Moreno said.

Instead, Moreno believes Strategy should temporarily pause new purchases and focus on rebuilding its balance sheet.

He also recommended other options for the Michael Saylor firm. Moreno said the company could either increase STRC's current 11.5% yield to attract investors or continue issuing additional MSTR shares to raise capital.

Analysts still see upside despite STRC dip

Meanwhile, not all experts are losing confidence in Strategy. Mark Palmer, a Benchmark analyst, maintained its buy rating on the company’s common stock, MSTR. The firm also kept its $570 price target. This suggests upside of more than 400% from current levels.

The firm also noted that heavy trading volumes during the recent STRC decline suggest investors are just repricing risk. They stated this does not mean investors are pulling out.

Furthermore, Strive’s Chief Risk Officer, Jeff Walton, said that he believes Strive’s preferred stock, SATA and STRC, would trend back to their $100 target price in due time.