Strategy Inc.'s Bitcoin Buying Spree Sparks Cash Reserve Warning

Strategy Inc.'s (Nasdaq: MSTR) preferred stock dividends are facing a sharp deterioration, prompting on-chain data firm Cryptoquant to warn that the company should pause its bitcoin purchases and rebuild cash reserves. The warning comes as Strategy's dividend coverage has fallen from over seven years at the start of 2026 to just 14 months, according to Cryptoquant Head of Research Julio Moreno.

Strategy's annual dividend obligations have climbed from about $300 million to roughly $1.2 billion as the firm issued more STRC preferred stock to fund bitcoin purchases. The company has also reduced its cash available to support these growing dividend payments by repurchasing $1.5 billion of its 0% convertible senior notes due in 2029.

The strain has been visible in the market price of the STRC, which has struggled to return to its $100 par value and even slipped below $90 at points. Investors appear to be reassessing the instrument's risk, despite a bitcoin rebound that has not fixed the problem.