AbstractThis study examines the effect of unique strategies on corporate cash holdings. We find a U‐shaped relationship between strategy uniqueness and cash holdings. When strategy uniqueness is low, the increase in uniqueness enhances a company's competitive advantage, leading to low demand for cash reserves. Conversely, when strategy uniqueness is high, the increase in uniqueness leads to higher information asymmetry, prompting firms to hold more cash to mitigate potential costs. The U‐shaped relationship is stronger for financially constrained firms and those with optimistic managers. Overall, we present a manifestation of the uniqueness paradox in corporate cash‐holding decisions, highlighting the pivotal role played by corporate unique strategies.