Strategy needs to pause Bitcoin purchases: a critical analysis of the cash reserve state
Strategy, a company known for its aggressive bitcoin accumulation strategy, has faced a serious challenge that requires an immediate reassessment of priorities. An analysis of fundamental indicators suggests that the current pace of BTC purchases has become unsustainable, and the US dollar cash reserve is rapidly depleting. I have concluded that the company needs to pause its purchases of the first cryptocurrency and focus on restoring liquidity.
Strategy's dollar reserve has shrunk by 38% since the beginning of 2026. Over the same period, annual dividend obligations on STRC preferred shares have nearly quadrupled — from $300 million to $1.2 billion. At the current STRC yield of 11.5%, dividend coverage has fallen from over seven years to a critical 14 months. This is an alarming signal that cannot be ignored.
Reserve Melts, Obligations Grow
A separate blow to liquidity came in May 2026, when Strategy spent $1.5 billion on repurchasing its own convertible bonds. This move, while justified from a debt management perspective, further narrowed the operational buffer. Last week, STRC fell to $82.50 — 17.5% below the nominal level of $100 — reflecting growing pressure on shareholder value.
Selling Bitcoin — Too Costly a Scenario
Rapidly restoring the reserve by selling part of the bitcoin holdings is unlikely and highly undesirable. Strategy has recorded an unrealized loss of $10.6 billion, as all coins purchased since 2024 are in the red. A forced sale would destroy shareholder value, although the company is not obligated to realize crypto assets to support STRC — alternative instruments exist.
What Needs to Be Done
My analysis shows that to return STRC to a comfortable level, Strategy's cash reserve must grow to $2.8 billion, providing 24 months of dividend coverage. The current reserve of $1.1 billion (as of mid-June) is clearly insufficient. The priority is an immediate pause in bitcoin purchases and the restoration of the dollar buffer. Only after this should a systematic approach to position building be adopted, rather than buying every time capital is raised.
Expert Commentary: STRC dividends are cumulative, so missed payments do not disappear and must be compensated later. This means the company is unlikely to decide to suspend them, making reserve restoration not just a recommendation but an urgent necessity. In current market conditions, a "buy and hold" strategy without considering liquidity management could lead to serious consequences for preferred shareholders.