Analysis: If the Strategy must sell BTC to pay dividends, it may face a downward spiral risk

June 18th: CryptoQuant analyst Maartunn posted that at current Bitcoin prices, Strategy’s BTC reserves are enough to cover its dividend payments for roughly 32 years. However, if Strategy has to sell BTC to make those dividend payments, that selling pressure could drive Bitcoin’s price down. A lower Bitcoin price would in turn shrink the value of its BTC reserves, cutting short the 32-year coverage period Maartunn highlighted. Put another way, if this cycle continues, there’s a risk it could turn into a downward spiral. As previously reported, Strategy’s preferred stock STRC has drifted sharply from its peg, hitting a recent low of $88.9. This significant deviation signals the market is demanding higher yields and has lost confidence in Strategy’s credit or dividend stability. Historically, Strategy relied heavily on issuing STRC to fund Bitcoin purchases. When STRC trades below face value, issuing new shares is no longer cost-effective for the company—effectively borrowing money at a higher rate. This weakens Strategy’s ability to keep buying Bitcoin. In response, Strategy took to social media to state: “The company’s Bitcoin reserves are sufficient to cover dividends for 32 years,” an attempt to reassure the market.