Strategy Faces Financial Crisis as CryptoQuant Warns of Bitcoin Accumulation's Dark Side

CryptoQuant Research Head Urges Strategy to Halt Bitcoin Purchases and Rebuild Cash Reserves

Julio Moreno, head of research at CryptoQuant, has publicly advised Strategy, the corporate Bitcoin treasury giant formerly known as MicroStrategy, to stop buying Bitcoin immediately. In a detailed analysis, Moreno argued that Strategy's deteriorating financial fundamentals are causing its preferred stock (STRC) to fall below $100.

Moreno challenged the prevailing narrative that leveraged position liquidations were driving STRC's decline. Instead, he pointed to the critical and worsening metric of the cash coverage ratio for STRC's dividend payments, which has dropped to an all-time low.

The company's dollar-denominated reserves are being rapidly depleted, while its annual dividend obligation for preferred stock has quadrupled in 2025 to $1.2 billion. Moreno emphasized that selling any portion of Strategy's massive Bitcoin treasury would likely trigger significant damage to shareholder value due to the current market conditions and cost basis.

Strategy has built its corporate identity around aggressive, continuous Bitcoin accumulation, funded largely through debt and equity offerings. However, Moreno's analysis suggests this strategy has reached a critical inflection point, where the company's operating cash flow and dollar reserves are no longer sufficient to cover growing fixed costs associated with preferred stock dividends.

For investors holding STRC, the warning signals are clear: dividend payments that made the preferred stock attractive are now under threat from Strategy's capital allocation strategy. Moreno concluded that Strategy's single most important strategic priority should be to halt all further Bitcoin purchases and focus on rebuilding its cash reserves to restore financial stability and protect shareholder returns.