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

Julio Moreno, head of research at the on-chain analytics firm CryptoQuant, has publicly recommended that Strategy — the corporate Bitcoin treasury giant formerly known as MicroStrategy — should immediately cease its ongoing Bitcoin acquisitions and adopt a more disciplined approach to its capital allocation. In a detailed analysis shared on social media, Moreno argued that the company’s deteriorating financial fundamentals, not market volatility, are the primary reason its preferred stock (STRC) has fallen below the $100 mark.

Why Strategy’s STRC Stock Is Falling

Moreno directly challenged the prevailing narrative that leveraged position liquidations were driving STRC’s decline. Instead, he pointed to a critical and worsening metric: the cash coverage ratio for STRC’s dividend payments has dropped to an all-time low. According to his analysis, Strategy’s dollar-denominated reserves are being rapidly depleted, while the annual dividend obligation for its preferred stock has quadrupled in 2025 to $1.2 billion.

The research head emphasized that while Strategy holds a massive inventory of Bitcoin, selling any portion of that treasury to raise cash would likely trigger significant damage to shareholder value, given the current market conditions and the company’s cost basis. This creates a financial bind where the firm’s primary liquid asset is effectively illiquid for operational needs.

The Core Problem: Cash Reserves vs. Bitcoin Accumulation

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. The company’s operating cash flow and dollar reserves are no longer sufficient to cover the growing fixed costs associated with its preferred stock dividends.

What This Means for Investors

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

Broader Implications for Corporate Bitcoin Strategies

This critique from a respected on-chain research firm adds a new layer of scrutiny to the corporate Bitcoin treasury model. While Strategy has been a pioneer in this space, its current financial strain may serve as a cautionary tale for other companies considering similar aggressive accumulation strategies without maintaining adequate cash buffers. The situation highlights the tension between long-term Bitcoin conviction and short-term financial obligations.

Conclusion

The recommendation from CryptoQuant’s research head represents a significant shift in tone from the analytics community, which has largely been supportive of Strategy’s Bitcoin-focused approach. As the company navigates this period of financial recalibration, the market will be watching closely to see whether the firm heeds this advice or continues its accumulation strategy. The outcome could have lasting implications for how public companies manage digital asset treasuries.

FAQs

Q1: Why did CryptoQuant’s research head recommend Strategy stop buying Bitcoin?
Julio Moreno argued that Strategy’s cash reserves are being depleted, and its annual dividend obligation for STRC preferred stock has quadrupled to $1.2 billion, making further Bitcoin purchases financially unsustainable.

Q2: Is the drop in STRC stock price caused by leveraged liquidations?
No. Moreno dismissed that theory and attributed the decline primarily to deteriorating fundamentals, specifically the all-time low cash coverage ratio for STRC dividend payments.

Q3: What should Strategy do instead of buying more Bitcoin?
According to Moreno, the company’s top priority should be halting Bitcoin acquisitions and focusing on rebuilding its dollar-denominated cash reserves to meet its dividend obligations and protect shareholder value.