Will 'Strategy' Halt Bitcoin Purchases? Debt and Dividend Pressures Mount as STRC Hits Record Lows

Executive summary

According to a report by CryptoQuant, "Strategy," the world's largest corporate holder of Bitcoin, is facing severe balance sheet pressure that could force an immediate halt to its aggressive treasury acquisition strategy. Julio Moreno, Head of Research at CryptoQuant, argued that the firm must immediately stop purchasing Bitcoin and focus on shoring up its cash reserves. This warning comes as the company's flagship preferred stock, Stretch (STRC), fell to a record low of $79.85 on Wednesday, driven down by ballooning dividend costs and a declining spot market.

The core of the issue lies in a structural liquidity mismatch. Strategy's annualized dividend obligations have nearly quadrupled since early 2026, reaching $1.2 billion. Meanwhile, its cash buffer—which stood at $2.2 billion at the start of the year—has been severely depleted following debt buybacks. Consequently, STRC's dividend coverage has collapsed from over seven years to just 14 months. With Bitcoin currently trading at $59,713 (representing a 4.0% decline over the past 24 hours and an 8.8% decline over the past week), Strategy's 847,363 BTC stockpile is valued at $50 billion, leaving its holdings roughly $13 billion underwater.

Why it matters

This development has direct implications for Bitcoin's market structure, capital flows, and institutional confidence. Historically, Strategy has acted as a persistent, price-insensitive buyer, issuing STRC shares at or above their $100 par value to fund further Bitcoin acquisitions. This mechanism has driven over $10 billion in purchases over the past year. However, with STRC now trading at a deep discount of $79.85, this acquisition engine is effectively broken. The firm cannot issue new shares without diluting existing holders and compounding its structural liabilities.

From a market structure perspective, the loss of Strategy's continuous bid removes a critical source of spot demand. If the firm is forced to transition from a buyer to a seller to cover its $1.2 billion annualized dividend obligation, the sentiment impact could be highly damaging. Although the company's recent sale of 32 Bitcoin for $2.5 million was minor, it spooked investors and raised questions about balance sheet health. Any larger-scale liquidation would likely be met with thin liquidity, driving up trading volume on sell-offs and putting downward pressure on spot prices. Conversely, if the firm successfully hoards cash and stabilizes STRC, it may restore confidence, though at the cost of halting its market-supportive buying spree.