CryptoQuant Analyst Flags Risk in Strategy’s 32-Year Bitcoin-Backed Dividend Plan

Strategy has stated that its STRC dividend obligations are covered for approximately 32 years, backed by a Bitcoin reserve valued at around $55 billion. The company also factors in a 3.1% BTC breakeven annual return rate in its coverage estimate.

However, concerns were raised about how this coverage could hold under market pressure. Specifically, CryptoQuant analyst JA Maartun noted that if Strategy were forced to sell Bitcoin to meet dividend payments, it could add selling pressure to the market and potentially push BTC prices lower.

He added that a drop in Bitcoin’s price would reduce the value of the reserve itself, which could, in turn, reduce the duration of reported dividend coverage over time.

Source: JA Maartun