CryptoQuant Urges Strategy to Pause Bitcoin Buys as Cash Reserves Drop 38%
Updated
Updated · CNBC · Jun 25
CryptoQuant Urges Strategy to Pause Bitcoin Buys as Cash Reserves Drop 38%
3 articles · Updated · CNBC · Jun 25
Summary
CryptoQuant said Strategy should stop buying bitcoin for now, rebuild cash and adopt a more disciplined purchase framework as weakening reserve coverage pressures its preferred stock STRC.
Strategy's USD reserve has fallen 38% this year to $1.4 billion while annualized dividend obligations have roughly quadrupled, cutting dividend coverage to 14 months from more than seven years, according to CryptoQuant.
STRC fell as low as $73.62 after dropping 20% below its $100 par on Wednesday, while Strategy shares slid to a fresh 52-week low of $86.62 after plunging more than 43% in June.
CryptoQuant said Strategy still holds about $50 billion in bitcoin but has an aggregate unrealized loss of $10.6 billion, meaning any forced sale would lock in losses and leave limited room to ease stress.
Strategy has said it plans to replenish reserves over time and that its capital structure remains manageable, while some bitcoin-focused analysts argue continued purchases can still strengthen STRC's long-term asset backing.