Michael Saylor’s investment strategy is facing increased scrutiny as recommendations emerge to pause its bitcoin purchases, focus on rebuilding cash reserves, and establish a more disciplined approach to acquiring the leading cryptocurrency. A recent report by CryptoQuant emphasizes the need for a systematic, fundamentals-based method for timing bitcoin purchases rather than the current practice of buying whenever capital becomes available.
Julio Moreno, head of research at CryptoQuant, highlighted that previous strategies of purchasing at market peaks and accumulating during downturns have resulted in significant unrealized losses, adversely affecting the fundamentals of the company’s flagship preferred stock, STRC. The report reveals a concerning trend: Strategy’s USD cash reserves have decreased by 38% since the beginning of the year, while its dividend obligations have quadrupled over the same timeframe. As of the latest filing, Strategy’s cash reserve stands at $1.4 billion.
Moreno pointed out that the dividend coverage—essentially how long the reserve can sustain dividend payments—has plummeted to just 14 months, a stark decline from over seven years previously. To stabilize the company, a cash reserve of approximately $2.8 billion is necessary for STRC to recover.
Currently, Strategy has around $50 billion in bitcoin, valued at present market prices. Despite maintaining that its capital structure is manageable even in challenging crypto conditions, Moreno cautioned that the company’s bitcoin holdings provide limited emergency relief. With an aggregate unrealized loss of $10.6 billion, all bitcoin purchases made in 2024, 2025, and 2026 are currently underwater, with losses for 2026 intensifying as purchases continued during the early phases of a bear market.
The report warns that any forced sale of bitcoin at current prices could solidify these substantial losses and severely impact shareholder value. Since June, Strategy’s shares have already taken a hit, dropping over 43% in that month alone. Recently, shares fell more than 9% to an intraday low of $92.28, marking the first time they dipped below $100 since 2024. Similarly, the preferred stock STRC has tumbled to $79.85, which is a record 20% below its $100 par value.
The downward trend has continued, with Strategy shares recently declining more than 5% after reaching a new 52-week low of $86.62, while STRC saw a nearly 2.5% drop.
