CryptoQuant has called on Strategy to halt its Bitcoin purchases and rebuild cash reserves after its preferred stock STRC hit a record discount. The move follows a sharp drop in dividend coverage and recent share sales to shore up liquidity.
Strategy spent $1.5 billion in May to repurchase convertible notes, cutting its cash buffer that supports dividends on its Variable Rate Series A Perpetual Stretch Preferred Stock. STRC fell to $82.50 last week, a 17.5% discount to its $100 target level.
The company's annualized preferred dividend obligations have risen to $1.2 billion. Cash reserves fell 38% this year, leaving coverage at about 14 months after previously exceeding seven years. CryptoQuant estimates Strategy needs roughly $2.8 billion to restore a 24-month reserve.
Last week Strategy sold 2.7 million MSTR shares for $335.5 million. It allocated $300 million to cash and used $35 million to buy 520 Bitcoin. Its total holdings reached 847,363 Bitcoin.
Benchmark Equity Research views the STRC decline as a normal yield adjustment rather than structural failure. CryptoQuant chief Ki Young Ju said the purchases act more as a liquidity sink and urged a shift to model-driven acquisitions.
