Strategy Needs Formal Bitcoin Trading Framework, CryptoQuant Says

Key insights

• CryptoQuant said liquidity risks have eased after reserves climbed to nearly $3 billion.
• The firm warned that no formal valuation model guides future Bitcoin purchases.
• Analysts believe disciplined selling during bull markets could strengthen long-term shareholder value.

Strategy has strengthened its financial position after rebuilding cash reserves to nearly $3 billion, but CryptoQuant argues the company still lacks a disciplined Bitcoin investment strategy. The analytics firm said the new capital framework eased immediate liquidity concerns, yet it failed to establish systematic rules for buying and selling Bitcoin across market cycles.

The assessment follows Strategy’s rollout of its Digital Credit Capital Framework, introduced after growing concerns over declining cash reserves and rising dividend obligations. CryptoQuant Head of Research Julio Moreno said the company improved its short-term stability, but long-term capital management remains incomplete without clear valuation models for Bitcoin purchases and sales.

Liquidity recovery strengthens balance sheet but questions remain

CryptoQuant reported that Strategy sold 3,588 Bitcoin between June 29 and July 5, raising about $216 million. The company then sold MSTR common stock between July 6 and July 12, generating another $466.7 million. Those transactions lifted dollar reserves from $1.44 billion to roughly $3 billion while leaving Bitcoin holdings at 843,775 BTC.

The stronger cash position also improved dividend coverage for STRC preferred shares. CryptoQuant estimated the available reserve now covers about 29 months of dividend payments, compared with only 14 months before the framework launched. Meanwhile, STRC shares recovered from around $75 during the liquidity scare to nearly $88.

Moreno said the company avoided aggressive Bitcoin liquidations that could have unsettled the market. Instead, it relied on stock sales and dividend adjustments to restore investor confidence. Even so, he argued these measures only addressed immediate funding needs rather than long-term investment discipline.

Key financial changes

Approximate holdings before the reported sales.

Missing investment discipline raises long-term concerns

CryptoQuant believes the biggest weakness remains the absence of a structured investment model. Moreno said the Digital Credit Capital Framework explains how Strategy can raise capital, but it offers no guidance on when Bitcoin should be accumulated.

According to the report, that gap increases the risk of buying Bitcoin near market peaks once prices recover. CryptoQuant previously criticized the company for continuing purchases during elevated market conditions, which contributed to shrinking cash reserves and weaker dividend coverage.

The report also questioned the company’s approach to selling Bitcoin. Moreno argued that current sales only support defensive objectives such as paying dividends and interest. He said an effective treasury strategy should also include planned profit-taking during market highs to create liquidity for future buying opportunities.

Says Michael Saylor, “Never Sell” Philosophy.

Michael Saylor’s Bitcoin strategy at Strategy is all about buying and holding Bitcoin rather than selling. This has been the fundamental treasury philosophy of the company, and has been emulated by several publicly listed companies that have adopted Bitcoin as a reserve asset.

CryptoQuant’s recommendation is different than that. The firm said it does not wish to forgo the accumulation of Bitcoin but should set rules for selling off its stock in bull markets. It claimed that it was better to make profit with discipline and it would make the company more liquid and would help it to buy more Bitcoin in the coming downfalls.

Wider implications for corporate Bitcoin strategies

The debate extends beyond Strategy, which remains the world’s largest corporate Bitcoin holder. Many listed companies have adopted similar treasury models, making its financial management closely watched across the digital asset industry.

CryptoQuant said companies holding large Bitcoin reserves should prepare for both rising and falling markets instead of relying only on long-term accumulation. A trading framework could help ease the pressure in times of downturns and help preserve capital for better opportunities.

Investor confidence was also an important factor mentioned in the report. Funding remains on the equity capital markets with strategy remaining dependent on that funding and good financing conditions being linked to good liquidity. If there is a loss of confidence in the market, raising more capital might end up costing more when the company requires financing.

Conclusion

To solve its short-term liquidity issues, Strategy has turned to selling bitcoins, issuing its first-ever equity offering, and bolstering cash reserves. Such moves helped to ease investor nerves in the days of financial stress and bolster dividend coverage.

But, according to CryptoQuant, the company still requires a strict investment approach to determine when to buy and when to sell BTC. The firm feels that inclusion of liquidity management and systematic trading rules would enhance long-term resilience and safeguard the shareholder value across market cycles.