JPMorgan Warns Strategy’s Bitcoin Sales Could Add Market Risk
JPMorgan says Strategy’s 847,363 BTC stash could add pressure to bitcoin liquidity and price discovery if the company starts making selective sales.
Key Takeaways
- JPMorgan says Strategy is taking on extra risk by allowing bitcoin sales in certain cases to cover preferred dividends.
- Strategy holds 847,363 BTC, or about 4% of bitcoin’s total supply, giving it outsized influence over market structure.
- The bank says Strategy needs more dollar reserves and points to softer demand for U.S. spot bitcoin ETFs and pending market structure legislation.
JPMorgan says Strategy’s new policy of selectively selling bitcoin to fund preferred dividends is adding an unnecessary layer of risk to the crypto market. The bank argues that the move raises uncertainty around Bitcoin, especially because Strategy is one of the largest corporate holders of the asset and has a meaningful impact on market structure.
New Policy Puts Pressure on the Market
This week, Strategy put in place a capital structure that allows it to sell bitcoin under certain conditions to pay preferred dividends. The board also gained flexibility to repurchase preferred stock and carry out buybacks. In addition, the company set a minimum cash reserve equal to 12 months of preferred dividends and interest, or about $2.55 billion (€2.2 billion), which covers roughly 17 months of obligations.
JPMorgan says that still falls short. Analysts led by Nikolaos Panigirtzoglou said investors would likely want coverage of 24 to 36 months before feeling comfortable, potentially through more common stock issuance to increase dollar reserves, even if those shares trade below NAV. The bank’s main concern is preventing Strategy from needing to sell bitcoin anytime soon.
Why Strategy Carries So Much Weight
Strategy, formerly MicroStrategy, rebranded itself in August 2025 as a Bitcoin development company. That move made it more than a standard public-market buyer. It has become a large-scale accumulation vehicle for bitcoin, using cash reserves, convertible bonds, high-yield debt, at-the-market equity offerings, and convertible preferred shares.
Using the numbers JPMorgan cited, Strategy holds 847,363 BTC on its balance sheet, which is about 4% of bitcoin’s total supply. The bank estimates the company bought roughly $13.7 billion (€12 billion) worth of Bitcoin this year, equal to about 70% of the total net inflows into digital assets that the bank expects. If a buyer that large also turns into a seller from time to time, it could have a real effect on Bitcoin liquidity and price discovery.
The new capital structure is part of a broader refinancing of Strategy’s balance sheet. In a recent look at that approach, it also became clearer how the company is using buybacks and bitcoin sales together to support liquidity and preferred payments.
Why This Matters for European Crypto Readers
The timing matters because demand for U.S. spot bitcoin ETFs has softened over the past few months. JPMorgan notes that those funds saw a record $4 billion (€3.5 billion) in outflows in June after a 13-day run of redemptions. For European crypto readers, that is a reminder of how dependent the market still is on a handful of major capital flows, from ETFs to corporate balance sheets.
The bank also links the broader outlook to the debate over U.S. market structure legislation. JPMorgan says a stronger second half of the year could depend on more cash sitting on Strategy’s balance sheet and on U.S. lawmakers approving the pending crypto market structure bill.
