Strategy’s perpetual preferred stock Stretch (STRC) is under serious financial stress due to two simultaneous pressures, reported onchain analytics firm CryptoQuant on Tuesday.

The Bitcoin bear market means that all BTC purchased between 2024 and 2026 is underwater, with $10.6 billion in unrealized losses, and cash reserves are depleted, down 38% since early 2026 after a $1.5 billion convertible senior note repurchase in May.

Strategy pays dividends on its Stretch product, which offers an 11.5% yield and is designed to trade at $100. However, it fell to a record low of $82.5 last week, a record 17.5% below par.

At current prices of $87.4, the current effective yield is 13.2%, according to the STRC tracker.

Stop Buying Bitcoin

The core problem is that Strategy’s dividend obligations have nearly quadrupled to $1.2 billion per year, while the cash to cover them has shrunk, collapsing dividend coverage from more than seven years to just 14 months.

Last week, Strategy claimed that it had 32 years of dividend coverage using its $55 billion Bitcoin stash, but the argument was flawed.

At current dividend obligations, restoring just 24 months of coverage would require a cash reserve of approximately $2.8 billion, roughly twice what Strategy holds today, said CryptoQuant.

STRC issuance has been an effective capital-raising mechanism for Bitcoin purchases, but the rapid growth of dividend obligations has become a structural liability that could weigh on its sustainability.

“The market appears to be pricing this risk; the STRC price decline reflects not only near-term cash reserve weakness but also long-term concerns about the company’s ability to service its growing dividend burden.”

They added that any forced Bitcoin sale at current prices would crystallize its unrealized losses scale, destroy shareholder value, and potentially catalyze another leg down for BTC spot markets.

CryptoQuant recommended that the company “pause Bitcoin purchases until cash reserves and dividend coverage are restored.”

Strategy’s annualized dividend obligations have nearly quadrupled to $1.2B, while its cash reserve has fallen 38% in 2026.

Dividend coverage collapsed from 7+ years to just 14 months.

The company needs to stop buying Bitcoin and rebuild cash. pic.twitter.com/TR0oaAnT5k

— CryptoQuant.com (@cryptoquant_com) June 23, 2026

Saylor seems adamant, however, with the firm’s latest purchase of 520 BTC for $35 million while increasing its USD reserve by $300 million to $1.4 billion on Monday.

STRC, MSTR, and BTC Declining

The move gave some brief respite to STRC, which returned to $88 on Tuesday, but it remains in trouble, trading below par.

Company stock (MSTR) has also taken a beating, tanking a further 5% on Tuesday to end the day trading at $103.84, its lowest level since early 2024, according to Google Finance.

The move coincided with another Bitcoin dip as the asset failed to hold $64,000 and fell to $62,000 on Tuesday. BTC reclaimed $63,000 during the Asian trading session on Wednesday, but had already started to fall back from that level at the time of writing.