G-Gregor

Strategy set up a $1.44 billion U.S. dollar reserve earlier this week, a move that signals the company is preparing for a bitcoin bear market, according to CryptoQuant.CryptoQuant’s Julio Moreno told The Block that the bear market began early last month and that, if it continues, bitcoin could trade between $70,000 and $55,000 next year.

Earlier this week, Michael Saylor’s bitcoin treasury company Strategy (ticker MSTR) established a $1.44 billion U.S. dollar reserve to support dividend payments on its preferred stock and interest on its outstanding debt. Onchain analytics firm CryptoQuant said the move shows Strategy is preparing for weaker market conditions ahead.

"Strategy appears to acknowledge a non-trivial probability of a deep or extended bitcoin drawdown," CryptoQuant wrote in a Wednesday report. "Establishing a 24-month USD buffer suggests an expectation that bitcoin could trade sideways or lower for an extended period, and that capital markets may be less receptive to future stock issuance."

Strategy's USD reserve, funded through its recent MSTR at-the-market share issuance program, is intended to cover at least 12 months of dividends. The company said it plans to strengthen the reserve over time with the goal of covering 24 months or more.

CryptoQuant said this dual-reserve model — holding both USD and bitcoin — reduces the risk of forced bitcoin sales during downturns. But it also marks a "tactical shift" from Strategy's 2020–November 2025 playbook of issuing equity and convertible debt to buy more bitcoin.

"The shift carries material implications for the bitcoin market," CryptoQuant said. "On one hand, Strategy's reduced marginal bitcoin buying softens a powerful demand channel that amplified previous bull cycles. On the other hand, the U.S. dollar reserve and newly disclosed hedging/ sale capability significantly reduce the probability of distress-driven bitcoin selling, which is ultimately supportive of long-run market stability."

CryptoQuant added that Strategy no longer treats its bitcoin exposure as untouchable across all market conditions. The company's management is now acknowledging that protecting the bitcoin stack requires flexibility — including cash buffers, hedging, and selective monetization in distressed scenarios, CryptoQuant said.

Strategy’s bitcoin purchases have been slowing throughout 2025. CryptoQuant said monthly buying fell from 134,000
$BTC -0.95%
in November 2024 to 9,100 BTC in November 2025. The company has purchased 135 BTC so far in December.

Strategy’s shift from aggressive bitcoin accumulation to a more conservative, liquidity-focused treasury approach coincides with bitcoin’s largest drawdown of 2025, CryptoQuant said, noting that nearly every major onchain and technical indicator now signals the market has entered a bearish phase. CryptoQuant's Bull Score Index recently fell to zero — its most bearish level — for the first time since January 2022.

CryptoQuant's head of research, Julio Moreno, told The Block that if the bear market continues, bitcoin could trade between $70,000 and $55,000 next year, with the latter figure in the "most bearish scenario."

Moreno added that Strategy’s creation of a USD reserve suggests the probability of selling "is a bit higher," though he emphasized this would be a last resort and that the company would turn to bitcoin derivatives first.

Mizuho maintains an outperform rating on MSTR
Investment bank Mizuho Securities also published a report on Wednesday, reiterating its outperform rating and $484 price target following Strategy's USD reserve announcement.

Mizuho said it hosted an investor Q&A with Strategy CFO Andrew Kang on Tuesday. Key takeaways included: The USD reserve is a liquidity risk-management tool, not a precursor to selling bitcoin; Strategy expects to grow the reserve further when its multiple-to-net-asset value (mNAV) is above 1, taking advantage of favorable market conditions; and Strategy believes it can sustain operations and dividend payments for more than three years at the current bitcoin price of about $92,700.

"Selling Bitcoin is considered a last resort, only if mNAV remains below 1 over a very extended period," Mizuho said. "The reserve provides a buffer to avoid forced asset sales, allowing the company to navigate prolonged crypto downturns."