JPMorgan warns of risks in Strategy’s Bitcoin sales policy

JPMorgan warns Strategy’s new Bitcoin sales policy increases market risk and volatility, urging higher cash reserves and cautioning that large BTC sales could destabilize the crypto market.

JPMorgan analysts have expressed concerns about Strategy’s (formerly MicroStrategy) revised Bitcoin sales policy, highlighting increased 'two-way' risk and heightened volatility in the cryptocurrency market. The new policy permits Strategy to sell up to $1.25 billion in Bitcoin to fund preferred stock dividends, interest expenses, and share repurchases, representing a significant departure from its previous buy-and-hold strategy. As of late June, Strategy’s cash reserves totaled $2.55 billion, covering approximately 17 months of obligations. However, JPMorgan recommends that reserves should cover 24–36 months to provide greater reassurance to investors. The analysts argue that issuing common equity to bolster cash reserves would be less disruptive than selling Bitcoin, given that Strategy controls about 4% of the total Bitcoin supply. JPMorgan warns that the company’s ability to both buy and sell substantial amounts of Bitcoin could further destabilize the market and drive up financing costs. Recent sales, such as 32 BTC for $2.5 million, have already fueled market debate and contributed to price declines.