Analysts warn: Strategy needs to pause Bitcoin purchases to save STRC
Strategy's aggressive bitcoin accumulation strategy has reached a critical point. Based on my calculations using the latest data, further disregard for fundamental indicators could lead to serious consequences for holders of STRC preferred shares. The company is strongly advised to pause purchases of the first cryptocurrency and urgently restore its dollar reserve.
The reserve is melting before our eyes, while liabilities grow
Since the beginning of 2026, Strategy's cash reserve in US dollars has shrunk by 38%. Over the same period, annual dividend payments on STRC have nearly quadrupled — from $300 million to $1.2 billion. At the current yield of 11.5%, dividend coverage — the time for which cash on hand is sufficient for payments — has collapsed from over seven years to a mere 14 months. This is an alarming signal.
A particularly painful blow to liquidity came in May 2026, when Strategy directed $1.5 billion to buy back its own convertible bonds. This move, while logical from a debt management perspective, further narrowed an already shrinking safety buffer. Last week, STRC fell to $82.50 — 17.5% below its par value of $100.
Selling bitcoin is a path to value destruction
Rapidly replenishing the reserve by selling digital gold is a scenario that, in my assessment, would be catastrophic. The company's unrealized loss on bitcoin stands at $10.6 billion. All coins purchased since 2024 are in the red. With a current portfolio of 847,363 BTC, a forced sell-off would not only destroy shareholder value but also cause irreparable reputational damage.
However, as the data shows, there is no need to fear forced liquidation. Strategy is not obligated to dump bitcoin to support STRC — it has other levers at its disposal. But this does not negate the need to act.
Necessary action plan
To return STRC to a comfortable level, the company's cash reserve must grow to $2.8 billion — this would provide 24 months of dividend coverage. As of mid-June, the reserve stood at only $1.1 billion. Priority number one is a pause in bitcoin purchases and building up the dollar cushion. Only after this should the company move to a more systematic and measured approach to new acquisitions, rather than buying assets with every capital raise.
It is important to remember: STRC dividends are cumulative. Missed payments do not disappear but accumulate, and they will have to be compensated in the future. This makes suspending dividends an extremely unlikely scenario.
My professional opinion: Michael Saylor's strategy, brilliant in a bull market, is now showing its vulnerability. Financial engineering cannot endlessly substitute for sound risk management. A pause is not a sign of weakness, but a sign of maturity. If Strategy does not reconsider its approach, the market will do it for them, and the cost of the mistake will be measured in billions.