The bank said Strategy's bitcoin sales policy adds avoidable market uncertainty and should be replaced with equity issuance to build cash reserves.
By Will Canny|Edited by Cheyenne Ligon Jul 2, 2026, 1:11 p.m. 2 min readMake preferred on Share this articleMake preferred on
- JPMorgan said Strategy's new bitcoin sales policy introduces "two-way" flow risk, adding uncertainty to crypto markets.
- The bank argued Strategy should hold cash reserves covering 24–36 months of dividend obligations, above its current 17-month buffer.
- Crypto sentiment could improve if Strategy expands reserves and Congress passes market structure legislation.
Wall Street bank JPMorgan (JPM) said Strategy's (MSTR) decision to allow selective bitcoin BTC$64,533.37 sales to fund preferred stock dividends has introduced avoidable "two-way" risk into crypto markets, increasing uncertainty and volatility.
Earlier this week, Strategy formalized a policy allowing bitcoin sales to support preferred dividend payments when appropriate, while also authorizing preferred stock repurchases and share buybacks as part of a broader capital structure strategy. The company also set a minimum cash reserve target equal to 12 months of preferred dividends and interest expense. Its current $2.55 billion reserve covers roughly 17 months of obligations.
However, JPMorgan's analysts "believe a higher coverage of 24-36 months would be needed (by issuing common equity to further increase dollar reserves even if this leads to the common equity trading at a discount to NAV) to make investors more comfortable with the idea that Strategy would not need to sell bitcoins in the foreseeable future," the team led by Nikolaos Panigirtzoglou said in its Wednesday report.
Strategy has become one of the largest corporate holders and buyers of bitcoin, with 847,363 BTC on its balance sheet. Its aggressive accumulation strategy has made the company a major source of demand for the cryptocurrency, meaning any shift toward selling the digital asset, even occasionally, could influence market liquidity, price dynamics and investor sentiment by introducing a new source of supply.
Demand for U.S. spot bitcoin exchange-traded funds (ETFs), the largest source of institutional crypto buying since their 2024 debut, has weakened sharply in recent months. The funds saw a record $4 billion in net outflows in June after a 13-day redemption streak pushed year-to-date flows into negative territory for the first time.
The bank said bitcoin came under pressure in late May and early June after Strategy disclosed in a June 1 regulatory filing that it sold 32 BTC between May 26 and May 31 to fund dividend payments. The sales compounded pressure from a broader repricing of Federal Reserve interest-rate expectations that had already weighed on bitcoin and gold.
JPMorgan noted that Michael Saylor's Strategy has become one of bitcoin's largest buyers, purchasing roughly $13.7 billion worth of the cryptocurrency year to date, about 70% of the bank's estimate for total net digital asset inflows. The company holds around 4% of bitcoin's total supply.
Given Strategy's size, the prospect of the company both buying and selling bitcoin creates unnecessary two-way flow risk for the market, the bank's analysts said. Greater price volatility could ultimately hurt the company itself by increasing the cost of raising equity and debt to finance future bitcoin purchases.
Current bearish sentiment could ultimately prove a contrarian bullish signal, but a stronger second half would depend on Strategy expanding its cash reserves and U.S. lawmakers approving pending crypto market structure legislation, the report added.
Read more: Cantor says bitcoin bear market may be entering final stretch
MicroStrategyJPMorganBitcoin NewsRelated AssetsBitcoin$64,533.370.79%
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