On-chain analytics firm CryptoQuant recommended that Strategy, led by Michael Saylor, stop buying bitcoin and focus on securing cash, The Block reported on Monday.

Julio Moreno (훌리오 모레노), head of research at CryptoQuant, said in a report that Strategy’s preferred stock STRC hit a record low last week at $82.50, down 17.5 percent from its par value of $100. He said it came as pressure from a bitcoin bear market coincided with a sharp drop in cash holdings.

Strategy has recently reduced the cash available to support STRC dividends by redeeming early $1.5 billion of convertible bonds maturing in 2029. Its cash holdings fell 38 percent from the start of the year. Dividend obligations, however, rose from about $300 million at the start of the year to about $1.2 billion now, nearly quadrupling in less than 6 months, because it issued more STRC to fund bitcoin purchases.

In this situation, the dividend capacity for STRC shrank sharply from more than 7 years at the start of the year to 14 months now. Moreno estimated that based on the current annual dividend burden of $1.2 billion, restoring dividend capacity to cover 24 months would require $2.8 billion in cash, about double the current level. "Expanding cash holdings is the most direct signal for the market to regain trust in STRC," he said.

Moreno said raising cash by selling bitcoin would also be a poor option. Strategy’s unrealised loss totals about $10.6 billion because all bitcoin it bought in 2024, 2025 and 2026 is now below its purchase price. "Forced sales of bitcoin at current prices would realise losses and damage shareholder value," he said.