CryptoQuant Tells Strategy to Stop Buying Bitcoin and Rebuild Its Cash Reserve

Since our previous coverage, Strategy's stock has continued deteriorating through the week, with shares hitting a fresh 52-week low of $86.62 as of Thursday morning, June 25, according to CNBC. That follows Wednesday's drop below $100 for the first time since 2024.

What CryptoQuant Actually Said

Julio Moreno, head of research at CryptoQuant, published a report this week arguing that Strategy should stop buying bitcoin until it stabilizes its finances. His specific prescription: pause purchases, rebuild cash reserves, and develop a rules-based acquisition strategy instead of buying "whenever capital is available."

Moreno's critique isn't philosophical. It's arithmetic. Strategy's USD cash reserve has fallen 38% since January 1, while annualized dividend obligations on instruments like its preferred stock STRC have roughly quadrupled in the same period, according to the CryptoQuant report.

Dividend coverage — meaning how long the reserve can fund payouts without new capital — has collapsed from more than seven years to just 14 months. Moreno says Strategy needs the reserve at $2.8 billion (representing 24 months of coverage) for STRC to recover to its $100 par value. As of a Monday SEC filing, that reserve stood at $1.4 billion. That's a $1.4 billion gap.

STRC Is the Specific Problem Right Now

The preferred stock STRC dropped to a record low of $73.62 on Thursday — 26% below its intended $100 par level — before recovering slightly. It was last trading nearly 3% lower, according to CNBC.

This matters because the STRC ATM (at-the-market) program is the mechanism Strategy uses to issue new shares and buy more bitcoin. Benchmark analyst Mark Palmer explained the circularity clearly in a note Monday: "When STRC trades near or above its intended $100 level, Strategy can efficiently issue new shares through its ATM program and use the proceeds to acquire additional bitcoins. When STRC is trading materially below par, then that mechanism slows, and the company's bitcoin acquisition activity slows with it."

The stock decline doesn't just reflect financial stress. It compounds it by cutting off the primary funding pipeline for new bitcoin purchases.

The Bull Case Is Not Imaginary

Strategy still holds approximately $50 billion in bitcoin at current prices, according to CNBC. That is a real, substantial asset. Bulls argue that the bitcoin position itself is the long-term backstop — that temporary pressure on STRC and the common stock doesn't threaten the underlying holdings unless Strategy is forced to liquidate, which it hasn't been.

Strategy itself said in the Monday filing that it "plans to continue replenishing the USD Reserve over time based on market conditions" and that the capital structure remains manageable even under adverse crypto conditions. That's the company's stated position, and bitcoin has recovered from larger drawdowns before, which would mechanically ease dividend coverage ratios and preferred share pricing.

That said, "the long-term thesis might work out" is a different argument than "the near-term structure is fine." The dividend coverage math doesn't wait for a bull market.

Buying at Cycle Tops Is the Core Criticism

Moreno's sharpest line is this: "Buying at cycle tops and accumulating during bear markets has resulted in rapid unrealized loss growth and deteriorating STRC fundamentals."

That is a timing criticism, not a bitcoin criticism. CryptoQuant isn't saying bitcoin is worthless. They're saying Strategy's purchase discipline has been poor — and that paying any price, anytime new capital arrives, is not a strategy. It's a habit.

The company has made its brand identity inseparable from relentless bitcoin accumulation. Any pause in purchases would be a significant philosophical shift for Saylor, who has publicly committed to a permanent accumulation posture.

What Happens Next

The concrete pressure point: dividend obligations on STRC are real and recurring. If the USD Reserve stays at $1.4 billion and keeps declining, Strategy will eventually face a choice between issuing equity at unfavorable prices, selling bitcoin to cover dividends, or seeking refinancing. None of those options is free.

The company has not announced any change to its bitcoin acquisition strategy as of June 25. Whether STRC can recover toward par — the threshold that would reopen the ATM program at useful scale — depends largely on bitcoin's price direction from here. No charges, regulatory investigations, or legal proceedings have been announced against Strategy or its principals.