Key Takeaways
Cryptoquant said Strategy’s dividend coverage fell from 7-plus years to 14 months, urging a pause on bitcoin buys.Strategy’s cash reserves dropped 38% in 2026 as annual dividend obligations climbed to about $1.2 billion.STRC preferred shares remain stuck below their $100 par value, signaling investor caution toward the firm.
A Collapse in Dividend Coverage
Strategy Inc. (Nasdaq: MSTR) should pause its bitcoin accumulation and prioritize rebuilding cash reserves, according to Cryptoquant, the onchain data firm whose research has tracked the company’s balance sheet closely. The warning followed a sharp deterioration in the metrics that support the firm’s preferred-stock dividends.
Cryptoquant Head of Research Julio Moreno said the company’s dividend coverage has fallen from more than seven years at the start of 2026 to just 14 months. Over the same stretch, annual dividend obligations have climbed from about $300 million to roughly $1.2 billion as the firm issued more STRC preferred stock to fund bitcoin purchases. He further added:
“As Strategy continues issuing STRC preferred stock to fund bitcoin purchases, its annualized dividend obligations have risen sharply while its cash buffer has thinned.”
The deterioration was compounded by capital decisions with Moreno noting that Strategy recently repurchased $1.5 billion of its 0% convertible senior notes due in 2029, a move that reduced the cash available to support those growing dividend payments.
STRC Stuck Below Par
The strain has been visible in the market price of the preferred shares themselves. Strategy’s STRC, a bitcoin-backed preferred stock, has struggled to return to its $100 par value, even slipping below $90 at points, as investors reassessed the instrument’s risk.
A bitcoin rebound has not fixed the problem, as reporting from journalist Laura Shin noted that STRC could not find its way back to par even as the company moved to a bi-monthly dividend cycle and added $300 million to bolster the structure, suggesting the discount is reflective of a deeper concern than short-term price swings.
Bitcoin.com News had reported last week that Cryptoquant flagged the risk that prolonged calm in bitcoin’s price could itself sink STRC, a scenario in which the preferred stock weakens not on a crash but on a lack of upside momentum.
What Strategy Would Need
At the current annual dividend burden of about $1.2 billion, Moreno estimated Strategy would need roughly $2.8 billion in cash reserves to restore 24 months of dividend coverage, close to double its present level. However, the firm’s cash position has been moving in the wrong direction as reserves have fallen by 38% since the start of 2026, even as dividend obligations have multiplied, leaving a widening mismatch between what Strategy owes and what it holds in liquid funds.
For a company that has built its identity on relentless bitcoin accumulation, the recommendation to pause buying cuts against its core playbook. In recent weeks, Michael Saylor has pushed back on bearish narratives, arguing the firm may sell bitcoin if needed while insisting its strategy keeps working.
That said, the immediate question is whether Strategy adjusts course given a pause in purchases and a rebuild toward the roughly $2.8 billion Cryptoquant cites would ease dividend-coverage concerns, but it would also mark a notable shift for a company synonymous with buying bitcoin at every opportunity.
Until coverage strengthens and the preferred stock recovers, the gap between Strategy’s bitcoin ambitions and its cash obligations is likely to remain a central question hanging over the firm.
