Saylor Responds to Strategy's Deepening Cash Strains Amid Bitcoin Price Volatility

Michael Saylor responded to the recent selloff in Strategy's stock and preferred shares by stating that 'volatility tests every capital structure.'

The company, which holds 847,363 Bitcoin at an average purchase price of $75,680 per coin, has seen its paper losses rise above $14 billion as Bitcoin broke through $58,000 for the first time since October 2024.

Strategy's variable-rate perpetual preferred shares (STRC) have traded near $74, a 26% discount to their par value of $100. This means that the company cannot raise capital on favorable terms because the mechanism that funds Bitcoin purchases through preferred issuance breaks down when preferred shares trade below par.

The pressure on Strategy's capital structure extends beyond Bitcoin's price. Annual dividend obligations on its preferred instruments have risen from $300 million at the start of 2026 to $1.2 billion, a fourfold increase in six months. Cash reserves have fallen 38% this year, and dividend coverage has compressed to about 14 months.

CryptoQuant has called on Strategy to halt Bitcoin purchases and rebuild cash reserves to $2.8 billion before resuming accumulation.