Strategy’s dividend obligations surged to $1.2 billion annually, cutting cash reserves by 38% and reducing dividend coverage to 14 months.
CryptoQuant recommended Strategy pause Bitcoin accumulation after its annualized dividend obligations rose from $300 million to $1.2 billion this year. Cash reserves fell 38% over the same period, shrinking dividend coverage from over seven years to 14 months.
The firm attributed the strain to ongoing issuance of STRC preferred stock to fund Bitcoin purchases. Dividend coverage deterioration prompted calls to rebuild liquidity before resuming acquisitions.
CryptoQuant also advised Strategy to sell portions of its Bitcoin holdings during bull markets to reduce leverage and replenish cash reserves.