Shares of Strategy Inc., (NASDAQ: MSTR), fell by more than 10 percent Tuesday to $92, the lowest level in two years. Bitcoin plummeted below $60,000. An analyst note issued by CryptoQuant cautioned that the company had overextended themselves and needed to stop bitcoin purchases.
Bitcoin fell to roughly $59,000 On the day, it lost more than $6700, or about 5%. This was its biggest single-day drop in several months. This sell-off caused a cascade of liquidation across the crypto derivatives market, forcing $1.1 billion worth of leveraged positions to be closed in a 24 hour period. 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.
Bitcoin and strategy fell together, as they almost always do. Shares opened near $103 and shed $10.97 from Monday’s close of $103.84 — the first time the stock has traded below Since March 2024, $100
Buy less, spend more with CryptoQuant
This slide occurred on the day CryptoQuant released a report urging Strategy to stop its bitcoin acquisition and replenish its reserves of cash before purchasing more. Julio Moreno was the head of Research at Strategy. identified Set of numbers telling the story of an under-pressure capital model.
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.
Cash reserves are down 38% for the year. Dividends, which once lasted more than 7 years, now last only 14 months. CryptoQuant advises that bitcoin purchases should be resumed only after the cash reserve has been restored to approximately $2.8 billion.
They are flashing an alarm. STRC (Strategy’s variable rate perpetual preferred) has traded near $84 – well below $100.
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.
The strategy cycle’s self reinforcing loop, reversed
Strategy built its model on premiums. MSTR share prices are volatile 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. Now, the stock is trading at around 0.80x mNAV (a discounted price to bitcoin NAV). That means both capital taps — common equity and preferred issuance — are constrained at the same time.
This company has 847.363 bitcoins, purchased at an average of approximately $75,680 for each coin. Bitcoin is now $59,324, and the gap between each coin has increased to over $16,000.
Peter Schiff has long been a critic of bitcoin and has followed the development of Strategy. 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 has made the first Bitcoin sale since nearly four years, in early June. offloading 32 BTC. The company presented the asset sale as proof that it was capable of covering dividend obligations. Investors are still unconvinced by the market reaction of today.
If Saylor decides to pause purchases as CryptoQuant suggests, or find another way forward, it is important to ask whether the model that was built for a bitcoin market with both a high premium and rising prices can still work in a situation where they have turned around.
Bitcoin currently trades at $59,000 and Strategy Shares are around $92.
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Source: bitcoinmagazine.com
