Strategy Inc. (NASDAQ:MSTR) should halt Bitcoin (CRYPTO: BTC) purchases entirely, according to CryptoQuant CEO Ki Young Ju, who warns that dividend coverage on (NASDAQ:STRC) preferred stock has collapsed from seven years to just 14 months.
STRC’s Cash Cushion Has Quietly Crumbled
Strategy’s $1.5 billion convertible note buyback in May turned out to be the real culprit behind STRC’s slide. The flagship preferred stock, which yields 11.5% and is designed to trade near $100, fell to $82.50 last week, a record 17.5% discount.
CryptoQuant traced the slide to a cash squeeze hitting from both directions: Strategy’s USD reserve has dropped 38% since the start of 2026 while annual dividend obligations have nearly quadrupled to $1.2 billion.
Moreover, CryptoQuant pegs the recovery threshold at $2.8 billion, enough to cover 24 months of dividends. Strategy currently sits at $1.1 billion, less than half that target.
Ki Young Ju’s Four-Step Fix For Saylor
Ju laid out a specific plan on X on Wednesdat.
He said Strategy should pause Bitcoin purchases until cash reserves and dividend coverage recover, then build a systematic, model-driven framework for purchase timing instead of buying whenever capital becomes available.
His third recommendation calls for a disciplined selling framework heading into the next bull cycle, treating partial profit-taking as risk management rather than abandoning the Bitcoin thesis.
“Strategy always buys the local top has become a real market meme,” Ju wrote.
He added that Strategy’s continuous buying may be preventing the kind of market-clearing drawdown that normally resets crypto cycles, keeping weak hands from capitulating and strong hands from re-accumulating aggressively.
Strategy Sits On A $10.6 Billion Unrealized Loss
CryptoQuant said all Bitcoin Strategy purchased in 2024, 2025, and 2026 now sits underwater, and any forced sale at current prices would lock in massive losses.
A forced sale remains unlikely because Strategy does not need to sell Bitcoin to support STRC. Instead, the company can raise the dividend or issue new shares, and it is already using both tools.
The Block’s research this week echoed similar concerns, noting Strategy’s $54.7 billion treasury sits $9.4 billion underwater and arguing MSTR common should not be viewed as Bitcoin at a discount.
MSTR Lands On Its Most Important Support Test Of The Cycle
MSTR fell 5.13% Tuesday, sitting directly on the $100 to $103 zone that has held as the key floor since 2024.
Holding this zone and reclaiming the 20 EMA at $128.37 opens recovery toward $142 to $155.
Breaking below $100 enters uncharted territory with no major support until much lower.
Image: Shutterstock
Recent Comments