Michael Saylor’s MSTR should pause its bitcoin (BTC) buying and rebuild cash

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The Squeeze on Strategy: Navigating Bitcoin Purchases and Dividend Obligations

Strategy finds itself in a tight spot as it grapples with the repercussions of its increased issuance of STRC to fund bitcoin purchases. The company’s annual dividend obligations have skyrocketed from $300 million at the beginning of 2026 to $1.2 billion currently, marking a nearly fourfold surge in less than six months.

CryptoQuant’s analysis indicates that Strategy needs to amass approximately $2.8 billion, equivalent to 24 months of coverage, for STRC to regain stability. Consequently, Strategy disclosed a $1.1 billion reserve in mid-June.

However, the reserve might not provide as much support as anticipated due to the company’s existing unrealized losses. CryptoQuant highlighted, “The company sits on a $10.6 billion unrealized loss, with all Bitcoin purchased in 2024, 2025, and 2026 underwater. Any forced BTC sale at current prices would crystallize large losses and destroy shareholder value.”

Despite the precarious position, Strategy is not immediately pressured to sell bitcoin to safeguard STRC. The company has the flexibility to increase dividends or issue new shares as signals of its financial stability, both of which it is currently employing.

CryptoQuant’s recommendation for Strategy is to pause bitcoin acquisitions, focus on rebuilding the reserve, and adopt a more systematic approach to timing future purchases. Rather than buying impulsively whenever capital is raised, a strategic purchasing strategy could mitigate risks and enhance financial resilience.

It’s important to note that Strategy cannot halt dividend payments to conserve cash. The dividends are cumulative, meaning any missed payments must be compensated later. Additionally, suspending dividends could harm the company’s reputation with preferred shareholders, a relationship Strategy values.

While CryptoQuant’s assessment offers a stark outlook, contrasting perspectives like Benchmark-StoneX’s analysis on Tuesday provide additional insights into Strategy’s current predicament.