Strategy Should Pause Bitcoin Buys or Risk Collapse: CryptoQuant

Key Insights:

• CryptoQuant CEO Ki Young Ju says Strategy should pause Bitcoin purchases and rebuild liquidity as STRC dividend obligations rise and cash reserves decline.
• STRC preferred shares have fallen to a roughly 17.5% discount to par, while annual dividend commitments have climbed to about $1.2 billion.
• Despite holding around 847,000 BTC, Strategy faces pressure from shrinking cash reserves, unrealized Bitcoin losses, and a weakening MSTR stock price.

CryptoQuant CEO Ki Young Ju warned on June 24 that Strategy (Nasdaq: MSTR) may need to pause its Bitcoin purchases to avoid a funding collapse.

In a report to clients, CryptoQuant highlights that Strategy’s balance sheet is under strain. Annual dividend payouts on its STRC preferred stock have nearly quadrupled to $1.2 billion this year, even as the company’s U.S. dollar reserve has plunged about 38%.

That leaves Strategy with only about 14 months of runway to cover dividends, down from over seven years at the start of 2026. Strategy’s STRC preferred shares now trade around $82–83, roughly 17–18% below par, reflecting these pressures.

Ki Young Ju bluntly summarized the situation on social media: “Strategy’s BTC buying here looks more like a liquidity sink than a price catalyst,” he wrote. He urged the firm to “pause Bitcoin purchases, rebuild cash reserves, and adopt a systematic framework for purchase timing.”

In other words, CryptoQuant believes Strategy has overextended itself by buying Bitcoin at cycle highs and must stop the race for now to shore up liquidity.

Strategy’s STRC Preferred Stock Under Pressure

Strategy’s STRC preferred stock, the 11.5%-dividend vehicle designed to trade near $100 par, has been the canary in the coal mine. It recently fell to about $82.50, a record 17.5% discount to par. As a result, its effective dividend yield has jumped to the low- to mid-teens (around 11.5–13%) to compensate holders.

CryptoQuant’s analysis notes that this decline is driven by the simultaneous hit to Bitcoin’s price and to Strategy’s cash buffer. To stabilize STRC, CryptoQuant says Strategy needs roughly $2.8 billion in cash on hand—about 24 months of dividend coverage.

That figure is nearly double the roughly $1.4 billion reserve Strategy reported in mid-June. Put simply, without rebuilding cash to that level, even a flat market could chip away at confidence in STRC.

A persisting drawdown would force STRC to trade further below par or force Strategy to pay higher dividends. Either of them burdens the company’s model.

Strategy’s Bitcoin Holdings and Cash Reserves

Strategy hasn’t stopped buying Bitcoin, even as pressure builds. In the first quarter of 2026, it added 520 BTC, worth about $35 million, and pushed its total stash to roughly 847,000 BTC.

It also raised cash. About $335 million came in through at-the-market MSTR stock sales. Roughly $300 million of that went into reserves, lifting cash to around $1.4 billion. So yes, it is still accumulating. But it is also clearly trying to shore up the balance sheet.

This move suggests a shift in focus toward balance-sheet safety. In fact, CryptoQuant emphasizes that rebuilding the cash buffer to $2.8 billion is a prerequisite for STRC to recover.

The report notes that Strategy’s decision in May to buy back $1.5 billion of convertible debt drained a significant portion of its cash cushion.

That debt repurchase, intended to strengthen the balance sheet, came just as Bitcoin’s price was dipping. That accelerated the shrinkage of reserves.

All told, the company now sits on about $10.6 billion in unrealized losses on its Bitcoin inventory, according to CryptoQuant. Any forced sale at current prices would crystallize those losses and “destroy shareholder value,” the firm warned.

MicroStrategy Stock Analysis

Investors did not love the message. MSTR stock dropped fast on June 23, closing around $103.80, about 5% lower than recent levels. It was also sitting near a one-year low.

Bitcoin was also weak. By late June, it was hovering around $62,500, down from the mid-$60,000s earlier in the month. Not a collapse. But not great.

CryptoQuant is not calling for an immediate sell-off. That is not the point. It is arguing for a more cautious stance from here.

Its key recommendation is that Strategy “should pause its bitcoin buying and rebuild the reserve first.” Only after shoring up liquidity should the firm return to accumulation with a disciplined, model-driven timing strategy.

Skipping STRC dividends is not really an option, since they are cumulative. Instead, CryptoQuant notes that Strategy could continue raising dividends or issuing equity to signal coverage, tactics it has already begun employing.

For now, Strategy’s executives, led by Michael Saylor, have defended their strategy. But CryptoQuant’s analysis highlights a clear tension: continue buying at all costs, or pause and shore up the model.

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