Strategy's $2.2 billion cash reserve has been sufficient to cover dividend obligations for over two and a half years.

Strategy has recently increased its cash reserves to $2.2 billion, securing a stable financial structure capable of covering approximately $82.4 million in annual preferred dividend obligations for over two and a half years. This move, by Strategy—the largest Bitcoin holder among publicly traded companies—serves as a crucial step in enhancing financial flexibility amid the volatile cryptocurrency market.

Cash Buffer Strategy to Overcome Short-Term Liquidity Crises

Last week, Strategy added approximately $740 million to its cash reserves through a stock offering. Strengthening its cash position helps alleviate short-term liquidity pressures and acts as a safeguard against the anticipated “Bitcoin winter” if Bitcoin prices follow the traditional four-year cycle. Currently, BTC is trading around $79,080, and Strategy’s enhanced cash reserves provide a solid foundation to ensure dividend payments amid market volatility.

The annual dividends across Series preferred stocks STRK, STRC, STRF, STRD, and STRE total approximately $82 million. This guarantees continuous dividend payments through 2026, 2027, and 2028, demonstrating the company’s strong commitment to its dividend pledge.

Fully Prepared for 2027 Convertible Bond Risks with Sufficient Cash

Strategy is prepared to address the maturing 2027 convertible bonds with the available cash. The principal amount of these bonds is $1 billion, and bondholders can exercise their put options to demand repayment at that time. If the conversion price exceeds $183 per share, the bonds will automatically convert into stock; otherwise, cash repayment is required. Currently, the stock price is around $165 per share, about 12% below the conversion price, indicating the possibility of cash repayment.

However, Strategy’s $2.2 billion cash buffer and its holdings of 671,268 Bitcoin provide additional asset liquidity options if needed. Jeff Walton, the company’s Chief Risk Officer, describes these cash reserves as a “USD battery,” capable of covering not only the 2027 bond put options but also preferred dividend coverage for the following 15 months.

Strategic Alignment with Bitcoin Halving Cycles

Strategy’s strengthened financial structure also strategically aligns with Bitcoin halving cycles. Bitcoin undergoes a halving approximately every four years, reducing mining rewards by 50%, with the next scheduled for April 2028. The company’s cash reserves provide about 32 months of coverage, offering sufficient buffer to navigate through 2026, 2027, and 2028. Historically, Bitcoin prices tend to be highly volatile after halving events, and this structure reflects the company’s deep understanding of market cycle risks.

While Strategy’s stock has declined about 45% since the beginning of the year and is currently trading near $163 per share, its reinforced cash position and massive Bitcoin holdings ensure long-term financial stability and operational flexibility.