Cash, Not Coins: STRC Plunge Pressures Strategy to Pause Bitcoin Purchases, Analyst Warns

Strategy’s engine for buying Bitcoin is seizing up right where it matters: cash coverage. As the firm’s preferred stock STRC sank to a record $79.85 on Wednesday—despite offering an 11.5% annual dividend—CryptoQuant’s Julio Moreno argued the playbook now needs a hard pivot. The recommendation is blunt: stop accumulating BTC immediately and rebuild the USD Reserve until the company has at least 24 months of dividend coverage.

Here’s the bind. Strategy’s “digital credit” vision relies on STRC trading near its $100 par. When it does, the company can issue more shares and convert that demand into fresh Bitcoin buys. With STRC sitting well below par for most of the past month, that flywheel has stalled, and pressure is bleeding into the rest of the capital stack. The firm’s common shares slid more than 10% to $92.28—a 27‑month low and roughly 80% off last year’s $457.22 multi‑year peak—while Bitcoin itself dropped 4% to a one‑month low of $59,175 before recovering to $59,632.

The core issue isn’t the asset; it’s the runway. Strategy entered the year with $2.2 billion earmarked for debt and dividend obligations. Since then, a repurchase of convertible debt and repeated dividend sweeteners have eroded that buffer. Moreno notes that STRC’s dividend coverage collapsed from more than seven years at the start of 2026 to just 14 months today. With annualized dividend obligations having nearly quadrupled to $1.2 billion, every extra point of yield may attract marginal demand for STRC in the short term, but it also shortens the fuse.

Investors can sense the reflexivity. A product built to trade at par becomes psychologically anchored to $100. Each time the price drifts, the temptation is to raise the dividend again (an eighth hike is widely expected) to coax STRC back to par. But rising obligations reduce liquidity flexibility precisely when BTC volatility demands it. That’s why Moreno’s cash‑first pivot resonates: a visibly larger USD Reserve is the cleanest signal for restoring confidence in STRC’s sustainability.

This isn’t just an accounting preference; it’s a strategic control problem. Without a rule‑based treasury framework, the firm’s BTC buys appear discretionary and pro‑cyclical. Moreno suggests two changes: target a 24‑month cash reserve and adopt a systematic approach to both timing purchases and managing sales. The market’s reaction to this month’s sale of 32 BTC for $2.5 million—telegraphed and trivial against holdings—shows how quickly narratives can turn when the sell discipline looks ad hoc. A transparent, rules‑driven cadence for accumulation and de‑risking would likely reduce that narrative volatility.

The alternative paths are uglier. Selling more BTC to fund dividends could lock in paper losses and erode shareholder value. Strategy disclosed ownership of 847,363 Bitcoin; with Wednesday’s slide, the stack was worth roughly $50 billion—about $13 billion underwater versus cost. Issuing STRC below par isn’t viable. Hiking dividends again could buy time but at the cost of compressing coverage further. A pause on BTC accumulation, coupled with deliberate reserve building, is the least reflexive and most controllable lever available.

There are signs Strategy understands this linkage to the dollar. The firm spent three straight weeks accumulating cash earlier this month, and outside analysts have noted that its fate now appears increasingly tied to the greenback. Still, given the speed at which obligations have ramped and the fragility of STRC’s price, the current pace likely won’t be enough to stabilize expectations without a clearer framework and explicit coverage targets.

The irony is that STRC has been remarkably effective at scaling Bitcoin exposure—more than $10 billion issued in under a year when trading at or above par. That success created its own structural liability: a larger, costlier promise to income‑seeking savers that must be serviced through multiple market cycles. When BTC is trending and credit is easy, the model hums. When BTC chops and funding tightens, the same structure can amplify stress.

Markets often forgive drawdowns; they rarely forgive opacity around cash. In this setup, a public commitment to 24 months of dividend coverage, a pause on incremental BTC purchases until that threshold is met, and a codified treasury policy for both buying and selling would likely do more to normalize STRC’s price than another dividend hike. It won’t thrill the maximalists, but it could re‑anchor the “digital credit” narrative to a base rate investors actually trust.