Strategy urged to halt Bitcoin buys as STRC slides 17.5% below par

CryptoQuant's warning that Strategy should pause Bitcoin purchases exposes a growing tension between the company's accumulation model and its preferred-stock obligations.

Strategy faces pressure to halt Bitcoin purchases after its preferred stock STRC slid to a record 17.5 percent discount to par, CryptoQuant data show.

"The company's strategic priority should be to pause Bitcoin purchases and rebuild its cash reserve," Julio Moreno, head of research at CryptoQuant, said in a June 23 report.

Annualized dividend obligations on STRC have nearly quadrupled to $1.2 billion from about $300 million at the start of 2026, while cash reserves contracted 38 percent over the same period. Dividend coverage has collapsed to roughly 14 months from more than seven years, Moreno calculated. The reserve stood near $2 billion before Strategy spent about $1.5 billion in May repurchasing its 0 percent convertible notes due 2029. Bitcoin traded near $62,534 as of 14:00 UTC on June 24.

Rebuilding the reserve to $2.8 billion — enough for 24 months of coverage — would require roughly double the current $1.4 billion cash balance. Selling Bitcoin to get there would crystallize an estimated $10.6 billion in unrealized losses, since Strategy's average acquisition cost near $75,000 sits well above Bitcoin's spot price.

Strategy had already begun moderating its approach before CryptoQuant's recommendation. In the week ending June 22, the company bought 520 Bitcoin for about $35 million while raising $335.5 million through common stock sales, routing $300 million into its cash reserve. A week earlier, it purchased 1,587 Bitcoin but still directed most proceeds to cash.

The shift marks a departure from Strategy's long-standing buy-only pledge. The company, which holds 847,363 Bitcoin, has built its public-market identity around aggressive accumulation using common stock, preferred stock and debt-linked securities. That model has come under scrutiny as STRC's discount to its $100 par value widened to 17.5 percent — a record low that Moreno attributed to deteriorating fundamentals rather than leveraged liquidations.

The $10.6 Billion Unrealized Loss Problem

Strategy cannot easily liquidate Bitcoin to address the cash shortfall. Every Bitcoin acquired during 2024, 2025 and 2026 sits below cost basis, creating an aggregate unrealized loss of $10.6 billion. A forced sale at current prices would destroy shareholder value, Moreno argued.

Instead, Strategy retains other levers: raising the 11.5 percent STRC dividend yield, issuing more MSTR common stock, or continuing to direct equity proceeds toward cash rather than Bitcoin. The company has already pulled the last lever, and the next weekly purchase update will show whether it keeps cash ahead of Bitcoin.

The broader implication extends beyond Strategy. As the flagship corporate Bitcoin holder, its funding model has influenced other firms considering digital-asset treasuries. The STRC stress suggests Bitcoin-heavy balance sheets still require conventional liquidity management — especially when preferred dividends and capital-market access are central to the funding structure.

This article is for informational purposes only and does not constitute investment advice.