Strategy’s Liquidity Sink Risk: Why It Needs to Hit Pause on Bitcoin Purchases Before It’s Too Late

Add ZyCrypto News On GoogleMichael Saylor’s Strategy Inc. is facing heavy criticism, even within crypto circles, for its aggressive Bitcoin-buying policy. Ki Young Ju, the founder of the on-chain analytics firm CryptoQuant, recently stated that Saylor needs to pause its mega BTC purchases before the company’s liquidity-sink risk increases and decimates it. In a lengthy tweet, Ki highlighted: Image Source: X Ki went to great lengths to explain the dangerous model of Strategy. In his opinion, Strategy’s random buying needs to be replaced by a systematic, model-driven purchase framework. This is in response to a popular meme that the company keeps buying “local peaks”, and as a result, its average buying cost increases, reducing the PNL value. What is a Liquidity Sink? A liquidity sink is a capital firm’s policy that absorbs funds or assets, thereby removing them from the supply. This dynamic can occur across several distinct contexts, ranging from global financial systems to digital assets. Strategy is absorbing a significant portion of Bitcoin’s supply, acting as a liquidity sink for the premier cryptocurrency. The company currently holds 843,000–847,000 BTC in its coffers, worth $53.08 billion. To fund this aggressive buying spree, Saylor has promised a high yield of 11.5% for new shareholders of the STRC stock. As a result, the company’s annual payables have reached over $1.5 billion, while it reported a net loss of $12.5 billion in the first quarter of 2026 alone. Its cash reserves have also fallen 38% in the current calendar year. The company’s core software business is still going strong and reported a revenue of $124 million during this time, but that won’t be enough to rescue the firm once its dues start to pile up. The Future Saylor has shown no indications that he wishes to sell any significant portion of Strategy’s Bitcoin reserves in the near future. However, analysts, including crypto OGs, are imploring him to consider selling at least some of the stash to benefit stockholders in the next bull market. Ki suggested: “[Strategy should] Create a disciplined selling framework for the next bull market. Partial sales near cycle highs would not mean abandoning Bitcoin. It would deleverage the company, realize shareholder value, and create dry powder to re-accumulate lower. That’s not trading. It’s risk management” According to Ki, a major price capitulation could be on the cards for Bitcoin, which is likely to be disastrous for Strategy. However, it remains to be seen what Saylor would do if such a situation arises in the coming months. The second half of 2026 is expected to see a major price correction based on historical data, and Strategy remains exposed to this volatility.