Strategy Told to Halt Bitcoin Purchases Amid Dividend Obligations

CryptoQuant has issued a report suggesting that Strategy, the rebranded MicroStrategy, should temporarily halt its Bitcoin purchases to restore market confidence. The reasoning behind this recommendation is that Strategy's dividend obligations have quadrupled in the past six months, while its cash reserves have eroded by 38% this year.

The company holds more than 840,000 Bitcoin, representing over 4% of the total Bitcoin supply, and has experienced aggregate unrealized losses of approximately $10.6 billion from its 2024-2026 purchases. CryptoQuant's chief analyst, Julio Moreno, argues that Strategy should target building cash reserves to around $2.8 billion to provide coverage for roughly 24 months of dividend payments.

This recommendation is not a call to abandon Bitcoin entirely but rather a suggestion to prioritize rebuilding its balance sheet and demonstrating its ability to meet annual dividend payments of $1.2 billion. If Strategy continues to deplete its cash reserves while maintaining fixed obligations, it may eventually face the need to sell Bitcoin to meet those obligations.