CryptoQuant warns dividend coverage at Strategy shrank to 14 months from 7 years; cash reserves down 38%. Alpha Score 26/100, Weak.
Alpha Score of 35 reflects weak overall profile with weak momentum, weak quality, moderate sentiment. Based on 3 of 4 signals – score is capped at 90 until remaining data ingests.
CryptoQuant flagged growing financial strains at Strategy (MSTR) in a report published this week, pointing to a sharp drop in cash reserves and surging dividend obligations on preferred stock. The on-chain analytics firm said the company's dividend coverage fell from more than seven years earlier in 2026 to roughly 14 months, threatening the sustainability of its aggressive Bitcoin accumulation.
Cash reserves have fallen about 38% since the start of the year, partly because of the early repurchase of $1.5 billion in convertible notes. Annualized dividend commitments have nearly quadrupled to roughly $1.2 billion, driven by expanded preferred-share issuance used to fund Bitcoin buys. CryptoQuant estimated that restoring a 24-month dividend coverage buffer would require building cash to around $2.8 billion -- nearly double current levels.
The firm also carries unrealized losses of about $10.6 billion on Bitcoin acquired between 2024 and 2026, when many positions were entered at higher prices. Realizing those losses at today's rates would erode shareholder value, the report said, and forced sales would be "highly undesirable."
CryptoQuant recommended pausing large-scale Bitcoin purchases until reserves improve. It also suggested a model-driven timing framework instead of the opportunistic buying that market commentary has often criticized as occurring near local highs. A separate proposal called for a clear profit-taking protocol during rallies, allowing selective sales to generate cash and deleverage the balance sheet without abandoning the core Bitcoin strategy.
CryptoQuant CEO Ki Young Ju said on social media that continuous buying under current high selling-pressure conditions functions more as a liquidity absorber than a catalyst for price appreciation. He noted that despite hundreds of billions in capital inflows and growth in Bitcoin's realized capitalization, prices have remained largely range-bound.
Strategy (MSTR) stock page carries an Alpha Score of 26/100, labeled Weak, reflecting the liquidity and coverage concerns outlined in the report. The company's response to the suggestions could shape both its stock performance and the broader market's view of institutional Bitcoin treasury management.
Drafted by a large language model from the source reporting linked above, then screened by automated publishing checks. It is not read by a journalist before publication. Some articles cite our Alpha Score. Verify prices and figures against the original source. Educational coverage, not personalized advice.