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

Strategy faces about $1.5 billion in annual preferred-stock dividends against roughly $477 million in software revenue, a cash-flow gap that Grayscale’s head of research, Zach Pandl, warns is a financing problem, not a bitcoin one.

• Key Takeaways:
• • Strategy owes about $1.5 billion in yearly preferred dividends against roughly $477 million in 2025 revenue.
• • Saylor’s firm sold 32 BTC for $2.5 million in May, its first bitcoin sale since 2022, to fund payouts.
• • Grayscale’s research head calls it a cash-flow problem as the preferred stack tops $15 billion.

A Cash-Flow Problem, Not a Crypto Problem

In a podcast with journalist Laura Shin, Grayscale’s head of research (who posts on X as LowBeta) argued that Strategy’s preferred-equity obligations are best understood “as a cash flow issue, not a crypto issue,” adding:

“ Bitcoin produces no yield. If the price doesn’t go up, there are only two ways to pay the coupon, and neither is clean.”

His distinction is important to note, given Strategy has marketed itself as a pure bitcoin proxy. But the bills it now owes are denominated in dollars and due on a schedule, regardless of where BTC trades.

The numbers are stark as well. Strategy faces roughly $1.5 billion in annual dividend obligations across its preferred-stock instruments, including STRC, its variable-rate “Stretch” preferred that carries an annual rate near 11.5%, and STRK, which pays 8%. Against that, its software business generated about $477 million in revenue in 2025, meaning dividend obligations outrun revenue by more than three to one.

The company’s cash position offers limited cover, with Strategy’s roughly $1 billion cash hoard covering less than a year of those payments. And the preferred stack itself has ballooned, swelling from around $730 million in early 2025 to roughly $15.5 billion by mid-2026. This growth, some analysts warn, could feed a “death spiral” if the company keeps issuing new shares to pay dividends on old ones.

Selling Bitcoin to Pay the Bills

Bitcoin.com News reported recently that Strategy sold 32 BTC for about $2.5 million at an average of $77,135 per coin in late May, its first bitcoin sale since 2022, to fund preferred dividends. Chairman Michael Saylor, long an evangelist of the “never sell” creed, has tried to recast the move as routine, insisting the company expects to acquire 10 to 20 BTC for every one it sells and declaring he wants to make STRC the best credit instrument in the world.

Markets were not entirely reassured and Strategy has since paused the at-the-market program through which it issues STRC (after the security slid well below the $100 level it was engineered to hold).

Regardless, not everyone reads the recent STRC weakness the same way because when the preferred slumped to an intraday low of $82.53, some analysts pinned the slide on a leverage-driven liquidation cascade rather than any cash-flow shortfall, arguing Strategy’s balance sheet remained intact and the dividend could keep flowing.

The cash-flow critique pushes back on that optimism because even if the coupon is covered today, the gap between dollar obligations and software revenue widens each time the company issues fresh preferred shares to cover the last round.

The Yield Problem at the Center

Every strand of the bearish case returns to the same point, which is bitcoin generates no cash flow. A company that holds dividend-paying stocks or interest-bearing bonds can service its obligations from the income those assets throw off. Strategy holds an asset that produces nothing until it is sold.

Saylor’s models suggest bitcoin need only appreciate a few percent a year to keep the machine running, but that assumption breaks down precisely when it is tested, that is, during prolonged downturns when BTC is flat or falling and the coupons still come due.