CryptoQuant warns on Strategy's dividend coverage as cash reserve falls 38%

Strategy's cash reserves are now enough to pay only 14 months of dividends from the previous seven-year level. CryptoQuant said the company should pause Bitcoin purchases and rebuild its reserves.

After Strategy's dividend coverage fell to 14 months from seven years, CryptoQuant said the company led by Michael Saylor should pause Bitcoin purchases and focus on replenishing its cash reserve that's down 38% year-to-date.

Strategy's dividend obligations have nearly quadrupled to $1.2 billion, as the company issued substantial new STRC preferred stock, which carries an 11.5% yield.

“They should pause Bitcoin purchases, rebuild cash reserves, and adopt a systematic framework for purchase timing,” wrote the market data analytics provider's CEO Ki Young Ju in a Wednesday X post, adding that the biggest public Bitcoin treasury holder should also create a “disciplined selling framework” for the next bull market.

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