According to a research report, CryptoQuant's Head of Research, Julio Moreno, stated that Strategy (MSTR.US), the bitcoin acquisition platform led by Michael Saylor, should cease purchasing the cryptocurrency if it aims to restore market confidence in its stock. Moreno indicated that the company's priority should be to rebuild its US dollar cash buffer rather than continuously buying bitcoin whenever capital is available. The firm needs to adopt a more systematic, fundamentals-oriented approach to timing its bitcoin purchases. "Buying at cycle tops and accumulating through a bear market has led to rapidly expanding unrealized losses and worsened STRG's fundamentals," Moreno said. The company is under pressure, as a months-long sell-off in bitcoin has sparked concerns about its debt-servicing capacity. Its STRG preferred shares fell to $82.50 last week, a 17.5% discount to their $100 face value, setting a record; the discount remained near 13% at Tuesday's close. Its common stock, MSTR, also fell to its lowest level since May 2024, highlighting investor anxiety over its financing model. For the company's model to remain viable, bitcoin's appreciation rate must outpace the compound growth of its debt. Currently, the firm's total holdings show a paper loss of $11 billion. Strategy pays an 11.5% annualized yield on its STRG shares, reset monthly, and has increased it multiple times since issuance to attract capital for buying bitcoin. According to its website data, the effective yield, based on STRG's current discounted price, is 13.17%. The company has no obligation to sell bitcoin to support STRG's price; it can signal its ability to sustain dividend payments by raising the dividend rate or issuing more common stock—tools already in use. However, these measures do not address the core issues of weakening cash coverage and a rising debt burden. Moreno noted that the bitcoin bear market adjustment coincided with a "synchronous depletion" of Strategy's cash reserves. He added that pressure intensified after the company repurchased $1.5 billion of zero-coupon convertible senior notes due 2029 in May, which "severely weakened" the cash buffer available to support STRG dividends. Moreno believes the "path back to par is not straightforward." He stated that Strategy's US dollar cash reserves have fallen 36% since early 2026 to $1.4 billion. Rebuilding cash reserves to approximately $2.8 billion, equivalent to 24 months of dividend coverage, is a "necessary condition" for STRG's recovery. Strategy (formerly MicroStrategy) has built one of the largest corporate bitcoin holdings globally. As demand from other large bitcoin buyers, including US exchange-traded funds (ETFs), has weakened, the market has increasingly relied on Strategy's purchasing power. However, in early June, the company disclosed the sale of 32 bitcoins, its first reduction since 2022. Although negligible compared to its roughly $57 billion holding, the sale was symbolic as it shook Saylor's "never sell" narrative. Since then, the company has continued accumulating bitcoin. According to a filing on Monday, Strategy purchased $34.9 million worth of the cryptocurrency between June 15 and 21. The purchase was funded entirely through the sale of Class A common stock, marking the third consecutive week the company relied on common stock financing, despite previous commitments to shift to perpetual preferred stock as a funding tool. The company also used related proceeds to increase its reserve by $300 million.