‘Stop Buying Bitcoin’: Strategy Needs More Cash Fast, Analyst Says as STRC Hits New Low

Ballooning costs associated with Strategy’s flagship preferred stock have left the Bitcoin-buying firm in a bind—and there’s only one real solution, as CryptoQuant argued on Tuesday.

If the world’s largest corporate holder of Bitcoin wants to take pressure off Stretch (STRC), it needs to stop purchasing the digital asset immediately and focus purely on shoring up cash, the analytics firm’s Head of Research, Julio Moreno, shared in a note.

On Wednesday, the product that currently offers an 11.5% annual dividend slipped to a record low of $79.85, according to Yahoo Finance. Meanwhile, Bitcoin had tumbled 4% over the past day, hitting its lowest level in over a month at $59,175 before ticking up to a recent price of $59,632, CoinGecko data showed.

Over the past month, STRC has struggled to trade at or above its $100 par value, challenging confidence in the company’s vision for “digital credit.” As savers’ faith has been tested, scrutiny has intensified on the preferred stock’s overall sustainability, Moreno wrote.

Analysts say that Strategy is likely to hike STRC’s dividend for an eighth time to try to coax its price back to the level that it’s designed to trade at, yet the likelihood of that recovery has been clouded by the firm’s lack of available cash, Moreno argued.

The sentiment echoes a note shared earlier this month by analysts at JPMorgan, who emphasized that Strategy’s fate now appears to be linked to the greenback. Around that time, Strategy shifted gears to accumulate cash for three straight weeks—though Moreno argues it is still not enough.

At the start of this year, the company had earmarked $2.2 billion for managing debt and dividend payments; however, that buffer has worn relatively thin since the company moved to repurchase a portion of its convertible debt several weeks ago.

“As cash reserves fell while dividend obligations rose, STRC dividend coverage collapsed from more than 7 years at the start of 2026 to just 14 months today,” Moreno highlighted. “A higher cash reserve is the most direct signal the market needs to regain confidence in STRC.”

From Moreno’s perspective, Strategy needs to accumulate cash reserves that would last the company 24 months. The company should also establish a “systematic framework” for timing its purchases and a framework for selling Bitcoin in a more disciplined way.

Investors were spooked this month when the company announced that it had sold 32 Bitcoin for $2.5 million. Although the liquidation was tiny compared to the firm’s holdings, and telegraphed in advance, the move raised questions about Strategy’s ability to buoy the Bitcoin market.

Since early 2026, Strategy’s dividend obligations have nearly quadrupled to $1.2 billion annualized. Moreno described ballooning costs as a “structural liability” that has the potential to compound pressure that the preferred stock has already come under.

The air of caution has coincided with a dip in Strategy’s common shares. The firm’s stock price tumbled more than 10% to a 27-month low of $92.28. That represented a nearly 80% decline from a multi-year peak of $457.22 last year.

STRC has enabled Strategy to accumulate swaths of Bitcoin this year. When the stock trades at or above the $100 mark, the company issues more shares to buy more Bitcoin. Since its introduction less than a year ago, Strategy has issued more than $10 billion of the product.

Moreno argued that Strategy is between a rock and a hard place. If the Bitcoin-buying firm decided to further pare its holdings and shore up cash for dividend payments, then the sale would solidify unrealized losses on the firm’s balance sheet and “destroy shareholder value.”

Earlier this week, the Tysons Corner, Virginia-based firm signaled that it currently owns 847,363 Bitcoin. With the digital asset’s fall on Wednesday, the firm’s stockpile was worth $50 billion, pushing the total value of its holdings roughly $13 billion underwater.