Strategy Inc. (NASDAQ: MSTR) shares fell more than 10% Tuesday to $92, a two-year low, as bitcoin cratered below $60,000 and an analyst note from CryptoQuant warned the company has overextended itself and should halt bitcoin purchases before its financial situation deteriorates further.
Bitcoin fell to roughly $59,000 on the day, a drop of more than $6,700 or about 5%, its worst single-day loss in months. The selloff sparked a liquidation cascade across crypto derivatives markets, with roughly $1.1 billion in leveraged positions forcibly closed within a 24-hour window. The move pushed bitcoin below the average cost basis for all of Strategy’s purchases made in 2024, 2025, and 2026 — leaving the company sitting on an estimated $10.6 billion in unrealized losses.
Strategy fell alongside bitcoin, as it almost always does. Shares opened near $103 and shed $10.97 from Monday’s close of $103.84 — the first time the stock has traded below $100 since March 2024.
CryptoQuant: Stop buying, rebuild cash
The slide came on the same day that CryptoQuant published a note calling on Strategy to pause its bitcoin accumulation and restore its cash reserves before buying more. The firm’s head of research, Julio Moreno, identified a set of numbers that tell a story of a company whose capital model is under strain.
Strategy’s annual dividend obligations — the payments owed on its stack of preferred instruments including STRC, STRK, STRF, STRD, and STRE — have grown from roughly $300 million at the start of 2026 to approximately $1.2 billion now, a near fourfold increase in under six months.Â
Cash reserves have fallen 38% this year. Dividend coverage, once more than seven years, has compressed to around 14 months. CryptoQuant recommends the company restore cash reserves to roughly $2.8 billion before resuming bitcoin purchases.
The preferred shares themselves are flashing a warning sign. STRC, Strategy’s variable-rate perpetual preferred, has been trading near $84, well below its $100 par value.
When preferred shares trade below par, the capital-raise mechanism that funds bitcoin purchases breaks down — the company can’t issue new preferreds at attractive terms if the existing instruments are trading at a discount.
Strategy’s self-reinforcing cycle, in reverse
Strategy’s model was built on a premium. When MSTR shares trade above the value of the bitcoin on its balance sheet, the company can issue stock or preferred instruments, use the proceeds to buy bitcoin, and push the NAV per share higher — a cycle that rewards existing shareholders. The stock now trades at a discount to its bitcoin NAV, an mNAV of approximately 0.80x. That means both capital taps — common equity and preferred issuance — are constrained at the same time.
The company holds 847,363 bitcoin, acquired at an average price of roughly $75,680 per coin. With bitcoin at $59,324, that gap has widened to more than $16,000 per coin across the entire stack.
Peter Schiff, a longtime bitcoin critic who has watched Strategy’s trajectory, said Tuesday that if MSTR shares continue to fall, Saylor could face pressure to sell bitcoin to meet obligations — a scenario that would put further downward pressure on the asset underpinning the entire structure.
Strategy made its first bitcoin sale in nearly four years in early June, offloading 32 BTC. The company framed the sale as a demonstration that it could cover dividend obligations through asset liquidation. The market’s reaction today suggests investors remain unconvinced.
Whether Saylor pauses purchases, as CryptoQuant recommends, or finds another path forward, the central question now is whether a model built to thrive with a premium and a rising bitcoin price can hold together in an environment where both have reversed.
At the time of writing, Bitcoin is trading at $59,300, and Strategy shares are near $92.
