JPMorgan has cautioned that a new policy adopted by Strategy, which allows the selective sale of some of its Bitcoin holdings, could pose an additional risk to the cryptocurrency market. The bank noted that Strategy, long recognized as one of Bitcoin’s most consistent institutional buyers, shifting to a position where it can sell when needed may create a two-way flow dynamic in market activity.
New Policy and JPMorgan’s Objection
On Monday, Strategy unveiled a program enabling it to liquidate part of its sizeable Bitcoin reserve—currently holding 847,363 BTC—should the need arise. The company aims to support preferred dividend payments and buybacks within this framework. Known previously as MicroStrategy, Strategy is a US-based company standing out for its significant Bitcoin allocation on its balance sheet.
In a note published Wednesday, JPMorgan analysts led by Nikolaos Panigirtzoglou warned that the move introduces an avoidable two-way market risk to the crypto sector. According to the analysts, Strategy accounted for about 70% of net digital asset inflows this year alone, making its purchasing heavily influential in maintaining market stability.
JPMorgan analysts underscored that Strategy, once among Bitcoin’s most reliable buyers, now poses a new uncertainty for the market as it positions itself to sell if necessary.
Cash Buffer Debate
JPMorgan contends that issuing common stock to increase its cash reserves would be a better avenue for Strategy to reassure investors. The bank argues that this step would help address concerns about the company potentially needing to sell Bitcoin in the short term.
Currently, Strategy holds $2.55 billion in cash—enough to cover its preferred dividend and interest obligations for about 17 months. JPMorgan, however, maintains that this offers insufficient protection against market uncertainty.
It is suggested that a cash coverage window of 24 to 36 months would provide a stronger safety margin, giving investors greater confidence that Bitcoin sales will not be required in the foreseeable future.
Analyst Opinions Diverge
Not all research houses share the same outlook. Following the announcement of the selective sales policy, Benchmark Equity Research maintained its “buy” rating on MSTR and reaffirmed its target price of $570—a level that implies over 500% upside from recent prices.
Benchmark analyst Mark Palmer described the new capital framework as a form of official flexibility, empowering Strategy to adjust its capital structure in response to market pressure. Palmer suggested this could be a clear positive for shareholders.
Stocks See Sharp Gains
Following the announcement of the new policy, MSTR shares surged. The price jumped 12.6% on Monday, closing near $92.68. STRC, which traded below $75 the previous week, rose nearly 10% to about $83.67.
| Asset | Period | Level | Change |
|---|---|---|---|
| MSTR | Near Monday close | $92.68 | 12.6% increase |
| STRC | Monday | Around $83.67 | Approx. 10% increase |
| MSTR | Wednesday | Above $100 | 27% rise from Friday’s low |
On Wednesday, MSTR climbed above $100, marking a 27% gain from its Friday low and adding approximately $5 billion to the company’s market capitalization. The latest trade data put the stock at $100.83, reflecting a daily increase of 7.93%.
