Grayscale Research Head Says Saylor’s Strategy Faces a $1.5 Billion Cash-Flow Trap, Not a Bitcoin One

A Cash-Flow Problem, Not a Crypto Problem

In a podcast with journalist Laura Shin, Grayscale’s caput of probe (who posts connected X arsenic LowBeta) argued that Strategy’s preferred-equity obligations are champion understood “as a currency travel issue, not a crypto issue,” adding:

“ Bitcoin produces nary yield. If the terms doesn’t spell up, determination are lone 2 ways to wage the coupon, and neither is clean.”

His favoritism is important to note, fixed Strategy has marketed itself arsenic a axenic bitcoin proxy. But the bills it present owes are denominated successful dollars and owed connected a schedule, careless of wherever BTC trades.

The numbers are stark arsenic well. Strategy faces astir $1.5 cardinal successful annual dividend obligations crossed its preferred-stock instruments, including STRC, its variable-rate “Stretch” preferred that carries an yearly complaint adjacent 11.5%, and STRK, which pays 8%. Against that, its bundle concern generated astir $477 cardinal successful gross successful 2025, meaning dividend obligations outrun gross by much than 3 to one.

The company’s currency presumption offers constricted cover, with Strategy’s astir $1 cardinal currency hoard covering little than a year of those payments. And the preferred stack itself has ballooned, swelling from astir $730 cardinal successful aboriginal 2025 to astir $15.5 cardinal by mid-2026. This growth, immoderate analysts warn, could provender a “death spiral” if the institution keeps issuing caller shares to wage dividends connected aged ones.

Selling Bitcoin to Pay the Bills

Bitcoin.com News reported recently that Strategy sold 32 BTC for astir $2.5 cardinal astatine an mean of $77,135 per coin successful precocious May, its archetypal bitcoin merchantability since 2022, to money preferred dividends. Chairman Michael Saylor, agelong an evangelist of the “never sell” creed, has tried to recast the determination arsenic routine, insisting the institution expects to get 10 to 20 BTC for each 1 it sells and declaring helium wants to marque STRC the best recognition instrumentality successful the world.

Markets were not wholly reassured and Strategy has since paused the at-the-market programme done which it issues STRC (after the information slid good beneath the $100 level it was engineered to hold).

Regardless, not everyone reads the caller STRC weakness the aforesaid mode due to the fact that erstwhile the preferred slumped to an intraday debased of $82.53, immoderate analysts pinned the descent connected a leverage-driven liquidation cascade alternatively than immoderate cash-flow shortfall, arguing Strategy’s equilibrium expanse remained intact and the dividend could support flowing.

The cash-flow critique pushes backmost connected that optimism due to the fact that adjacent if the coupon is covered today, the spread betwixt dollar obligations and bundle gross widens each clip the institution issues caller preferred shares to screen the past round.

The Yield Problem astatine the Center

Every strand of the bearish lawsuit returns to the aforesaid point, which is bitcoin generates nary currency flow. A institution that holds dividend-paying stocks oregon interest-bearing bonds tin work its obligations from the income those assets propulsion off. Strategy holds an plus that produces thing until it is sold.

Saylor’s models suggest bitcoin request lone admit a fewer percent a twelvemonth to support the instrumentality running, but that presumption breaks down precisely erstwhile it is tested, that is, during prolonged downturns erstwhile BTC is level oregon falling and the coupons inactive travel due.