CryptoQuant has warned that Strategy may need to slow down its Bitcoin buying and focus on rebuilding its cash reserves as concerns grow over the company’s financial commitments.
According to the crypto analytics firm, Strategy’s annual dividend obligations have risen sharply, reaching around $1.2 billion. At the same time, the company’s cash reserves have been shrinking, putting greater pressure on its balance sheet.
The concern centers on STRC, Strategy’s preferred stock product. CryptoQuant noted that the company’s cash reserves have fallen significantly this year, while the amount of time those reserves can cover dividend payments has dropped from more than seven years to roughly 14 months.
CryptoQuant believes Strategy should temporarily pause its Bitcoin purchases and strengthen its cash position. The firm estimates that rebuilding a comfortable reserve cushion could require billions of dollars in additional cash.
CryptoQuant CEO Ki Young Ju also questioned whether Strategy’s Bitcoin buying is still having the same impact on the market as it did in the past. He argued that in the current environment, ongoing purchases may simply help support prices rather than drive major rallies.
According to Ju, large amounts of capital have continued flowing into Bitcoin over the past two years, but prices have struggled to make significant gains. He believes the market may still need a broader reset before a stronger trend can emerge.
Despite the criticism, Strategy has continued adding to its Bitcoin holdings while also increasing its cash reserves. The company recently purchased more Bitcoin and boosted its dollar reserves, showing an effort to balance growth with liquidity.
The debate has also focused on STRC, which was designed to trade near a fixed value while offering investors a high yield. However, the stock has recently traded below its target level, raising questions about investor confidence and the long-term sustainability of the structure.
Meanwhile, Strategy’s shares have faced pressure alongside Bitcoin’s recent decline. As Bitcoin moved lower, investors paid closer attention to the company’s financial strategy because it remains the largest publicly traded corporate holder of Bitcoin.
Strategy co-founder Michael Saylor has continued to defend the company’s approach, arguing that its Bitcoin holdings and cash reserves significantly outweigh its debt obligations. He has also pointed to the billions of dollars the company has raised and invested in Bitcoin over the past several years.
CryptoQuant’s warning does not suggest that Strategy is facing an immediate financial crisis. Instead, it highlights growing concerns about balancing continued Bitcoin purchases with dividend commitments and maintaining enough cash reserves during a period of market weakness.
