JPMorgan: Strategy's $1.25B Bitcoin Monetization Program Could Add New Market Risk

JPMorgan said Strategy's updated approach to managing its Bitcoin position could inject fresh uncertainty into crypto markets by turning one of the largest corporate Bitcoin buyers into a potential seller. In a new note, analysts led by Nikolaos Panigirtzoglou said Strategy's decision to permit selective Bitcoin sales to help fund preferred stock dividends introduces a "twoway" flow dynamic. With Strategy holding 847,363 BTC and roughly 4% of Bitcoin's total supply, even limited selling activity could attract outsized market attention. The warning follows a June 1 regulatory filing showing Strategy sold 32 BTC between May 26 and May 31 to cover dividend payments. JPMorgan noted Bitcoin traded under pressure around that period, alongside broader headwinds from shifting interest-rate expectations that also weighed on crypto and gold. JPMorgan also questioned whether Strategy's cash buffer is sufficient. The company has set a minimum reserve target equal to 12 months of preferred dividends and interest expense. Its current $2.55 billion cash reserve covers roughly 17 months, which the bank said may still leave investors uneasy. JPMorgan suggested Strategy may need 24 to 36 months of coverage to reduce concerns over additional Bitcoin sales. To build reserves, the analysts said Strategy should consider issuing common equity, even if that results in the stock trading at a discount to net asset value. In their view, a larger cash cushion would lower the likelihood of Bitcoin sales, reduce uncertainty around future funding, and potentially support capital-raising for additional Bitcoin purchases by limiting volatility. Strategy recently adopted a broader capital framework that includes a $1.25 billion Bitcoin Monetization Program, preferred stock repurchases, common share buybacks, and a formal cash reserve target. The framework allows Bitcoin sales of up to $1.25 billion to support reserves, dividends, interest payments, and repurchases, though the company has not indicated it will use the full amount. The plan also targets STRC, Strategy's preferred stock, to trade near $99 to $100 over time. Michael Saylor wrote on X: "As Strategy disclosed Monday: our corporate objective is for STRC to trade over time at $99–$100." Strategy has also raised STRC's dividend rate to 12.00% for July 2026 record dates. Since the announcement, investor sentiment has improved and MSTR has rallied. As of press time, Strategy shares were back above $100, up more than 23% from last Friday's low. Looking ahead, JPMorgan said a stronger second half for Bitcoin may hinge on Strategy further strengthening its cash reserves and U.S. lawmakers advancing crypto market structure legislation, including the CLARITY Act.