CryptoQuant Calls on Strategy to Halt Bitcoin Buying and Restore Cash Reserves

CryptoQuant Head of Research Julio Moreno has called on Strategy to temporarily halt its Bitcoin accumulation program as mounting dividend obligations and declining cash reserves put pressure on the company’s financial position.

Moreno noted that Strategy’s annualized dividend payments linked to its STRC preferred stock have surged from around $300 million at the start of the year to approximately $1.2 billion. Meanwhile, the company’s cash reserves have fallen by 38%, significantly weakening its financial cushion. Consequently, dividend coverage has dropped from more than seven years to roughly 14 months.

In light of these trends, Moreno advised Strategy to prioritize rebuilding its cash reserves and improving its capacity to meet dividend commitments before making additional large-scale Bitcoin purchases. He also recommended adopting a more disciplined Bitcoin acquisition framework. He further suggested that the company could selectively sell part of its Bitcoin holdings during future market rallies to lock in profits, reduce leverage, and strengthen liquidity.

Source: The Block