MicroStrategy, led by Michael Saylor, has identified its name with Bitcoin more than any other company in the world, operating as the ultimate... buyer, incessantly sweeping up every available coin. However, a revealing report by the analytics firm CryptoQuant sounds the alarm, revealing that the company is facing a serious liquidity crisis, with its cash reserves shrinking dangerously and its obligations soaring to $1.2 billion. With unrealized losses from its Bitcoin purchases reaching $10.6 billion, the crypto market is holding its breath. If Saylor is forced to hit the "brakes" on purchases or—in a worst-case scenario—proceed with a forced sale of assets to cover the "holes," the impact on the price of Bitcoin could be catastrophic.
The scathing CryptoQuant report
Strategy (MSTR) must stop buying Bitcoin, rebuild its cash reserves, and become much more disciplined regarding when it buys, the on-chain analytics firm CryptoQuant stated in a report shared with CoinDesk. The pressure appearing on the company's preferred STRC shares is an indication that the business has become overextended, it added. STRC, the iconic preferred share of Strategy, fell to around $82.50 last week, marking a historical low 17.5% below the $100 level around which it is designed to trade. The preferred share is a class of equity that pays a fixed dividend, and STRC currently yields 11.5%. The drop occurred as the Bitcoin correction and the shrinking of cash reserves coincided in time.
Concerns over liquidity and dividends
One concern involves the cash backing these dividends. Strategy's US dollar reserve has decreased by 38% since the beginning of 2026, CryptoQuant stated, while its annual dividend obligations have almost quadrupled, reaching $1.2 billion. Dividend coverage, a measure of how long the reserve could continue to fund payments, has collapsed from over seven years to about 14 months. A significant reason was that Strategy spent $1.5 billion in May to buy back its convertible bonds—debt that can later be converted into shares—depleting the "cushion" that supports STRC. The pressure is coming from both directions. As Strategy issued more STRC shares to fund Bitcoin purchases, its annual dividend obligations skyrocketed from about $300 million at the beginning of 2026 to $1.2 billion today, an almost fourfold increase in less than six months.
The struggle to maintain shareholder value
CryptoQuant noted that the reserve needed to reach approximately $2.8 billion, or 24 months of coverage, for STRC to recover. As such, Strategy reported a reserve of $1.1 billion in mid-June. Thus, its Bitcoin offers less support than its size suggests. "The company is sitting on an unrealized loss of $10.6 billion, with all the Bitcoin purchased in 2024, 2025, and 2026 being 'underwater' (at a loss)," CryptoQuant reported. "Any forced sale of BTC at current prices would crystallize large losses and destroy shareholder value." However, a forced sale is unlikely soon. Strategy is not required to sell Bitcoin to defend STRC and can instead increase the dividend or sell new shares to show that it can continue to pay—tools it is already using.
Recommendation for... a freeze on Bitcoin purchases
The CryptoQuant recipe is for Strategy to freeze its Bitcoin purchases and first rebuild its reserve, then adopt a systematic approach regarding the timing of purchases, rather than buying whenever it raises capital. Strategy cannot simply turn off the payment tap to save cash. STRC dividends are cumulative, meaning any missed payment must be made up later, and CryptoQuant stated that the company is unlikely to suspend them anyway, because doing so would damage its credibility with the preferred share holders it needs. This report is sharper than the one presented by Benchmark-StoneX on Tuesday. Benchmark analyst Mark Palmer dismissed comparisons between STRC and the collapsed Terra stablecoin, and argued that the company's financing mechanism has become "less efficient" rather than broken. What CryptoQuant is asking for would be a true rupture with the way Strategy operates. The company buys Bitcoin almost continuously, having created a reserve of approximately 847,000 coins, and Michael Saylor has made relentless accumulation the centerpiece of its identity. A pause to rebuild cash would stabilize STRC, but it would also stop the purchases that have defined the company.
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