(NASDAQ:MSTR) Shares of Strategy Inc. fell. (NASDAQ: MSTR) rose more than 10% on Tuesday to $92, a two-year low, as bitcoin fell below $60,000 and an analyst note from CryptoQuant warned that the company had overstepped its bounds and should halt bitcoin purchases before its financial situation deteriorates further.
Bitcoin It dropped to nearly $59,000 On the day, it fell more than $6,700, or about 5%, the worst single-day loss in months. The sell-off sparked a series of liquidations across cryptocurrency derivatives markets, with nearly $1.1 billion of 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 with an estimated $10.6 billion in unrealized losses.
The strategy came together with Bitcoin, as it almost always does. Shares opened near $103 and lost $10.97 from Monday’s close of $103.84 — the first time the stock has traded It has been traded below $100 since March 2024.
CryptoQuant: Stop Buying, Rebuild Money
This decline came on the same day that CryptoQuant published a note calling on the strategy to pause Bitcoin accumulation and restore its cash reserves before buying more. The company’s head of research, Julio Moreno It has been identified A set of numbers that tell the story of a company whose capital model is under pressure.
The strategy’s annual dividend obligations – payments due on its preferred instrument group including STRCand STRK, STRF, STRD, and STRE — from about $300 million at the start of 2026 to nearly $1.2 billion now, a nearly four-fold increase in less than six months.
Cash reserves have fallen by 38% this year. Dividend coverage, once more than seven years, has been compressed to about 14 months. CryptoQuant recommends the company restore cash reserves to approximately $2.8 billion before resuming Bitcoin purchases.
Preferred stocks themselves are flashing a warning sign. STRC, the strategy’s preferred variable rate, was trading near $84, well below its notional value of $100.
When preferred shares are trading below par, the capital raising mechanism that funds Bitcoin purchases breaks down – the company cannot issue new preferred shares on attractive terms if existing instruments are trading at a discount.
The self-reinforcing cycle of strategy, in reverse
The strategy model is built on an excellent foundation. When MSTR shares are traded above With the value of bitcoin on its balance sheet, a company can issue preferred shares or instruments, use the proceeds to buy bitcoin, and push the net asset value per share higher — a cycle that rewards existing shareholders. The stock is now trading at a discount to Bitcoin NAV, an mNAV of about 0.80x. This means that both capital withdrawals – common stock and preferred issues – are restricted at the same time.
The company owns 847,363 bitcoins, acquired at an average price of about $75,680 per coin. With Bitcoin reaching $59,324, this gap widened to more than $16,000 per coin across the entire group.
Peter Schiff, a long-time Bitcoin critic who has watched the strategy unfold, He said On Tuesday, if MSTR shares continue to decline, Saylor could face pressure to sell bitcoin to meet obligations — a scenario that would put more downward pressure on the asset that supports the entire structure.
Strategy made its first Bitcoin sale in nearly four years in early June. unloading 32 Bitcoin. The company framed the sale as evidence of its ability to cover its dividend obligations by divesting assets. Today’s market reaction suggests that investors are still unconvinced.
Whether Saylor pauses his purchases, as CryptoQuant recommends, or finds another way forward, the central question now is whether a model designed to thrive at a premium and a high Bitcoin price can hold together in an environment in which both are reversed.
At the time of writing, Bitcoin is trading at $59,300, and shares of the strategy are approaching $92.
