Key Takeaways:
JPMorgan warned that Strategy's new policy to sell up to $1.25 billion in Bitcoin introduces avoidable two-way risk into crypto markets, breaking the company's long-held accumulation narrative.
JPMorgan said Strategy's new Bitcoin sales policy creates unnecessary two-way risk for crypto markets, turning the largest corporate BTC holder from a predictable buyer into a potential source of supply.
"Strategy's decision to allow selective Bitcoin sales to fund preferred stock dividends has introduced avoidable two-way risk into crypto markets," Nikolaos Panigirtzoglou, an analyst at JPMorgan, said in a July 2 note reported by CoinDesk.
The company formerly known as MicroStrategy may sell up to $1.25 billion of Bitcoin to strengthen its balance sheet, fund preferred dividends and support share buybacks. Strategy holds 847,363 BTC worth roughly $50.4 billion as of late June, according to Reuters. Its cash reserve of $2.55 billion covers only 17 months of preferred dividend and interest obligations, below the 24-to-36-month coverage JPMorgan recommends.
The shift matters because Strategy has purchased approximately $13.7 billion of Bitcoin in 2026 alone, making it the largest single corporate buyer. Any signal that the company could sell creates uncertainty that may increase Bitcoin's price volatility and raise the cost of future equity and debt financings for Strategy itself, the bank said.
The warning follows Strategy's late-June capital management update, which gave the company broader flexibility to sell Bitcoin under defined conditions. The company raised its STRC preferred stock dividend to 12%, authorized up to $1 billion in buybacks for common stock and digital credit securities, and increased its dollar reserve to $2.55 billion.
Strategy's May sale of 32 Bitcoin for approximately $2.5 million between May 26 and May 31 marked its first BTC sale since 2022 and a reversal from Executive Chairman Michael Saylor's public "never sell" stance. JPMorgan said that transaction contributed to Bitcoin's stress in late May and early June, when the largest cryptocurrency fell toward $64,000.
How the Policy Shift Changes Market Dynamics
Strategy's prior model was straightforward: issue equity or debt, buy Bitcoin, hold indefinitely and repeat while the stock traded at a premium to its Bitcoin net asset value. That structure worked best when investors rewarded the company with a premium valuation and when Bitcoin prices were rising.
The model came under pressure in 2026 as Strategy's enterprise value fell below the value of its Bitcoin holdings, weakening its ability to issue equity at attractive terms. Preferred stock demand weakened and dividend obligations became a larger focus for investors. The company responded by increasing its dollar reserve and authorizing buybacks — steps that JPMorgan said may reassure equity and preferred holders but at the cost of introducing Bitcoin sale risk into the broader market.
Citi maintained a 'Buy' rating on Strategy with a $260 price target, saying the plan buys the company more time for Bitcoin to potentially stabilize and lessens the risk to its issuer rating.
What to Watch Next
JPMorgan said Strategy should rebuild cash reserves through common equity issuance rather than Bitcoin sales, and target 24 to 36 months of dividend coverage. The bank added that the second-half outlook for crypto markets depends partly on Strategy expanding its dollar reserves and the U.S. approving the CLARITY Act.
For the broader market, the shift weakens the clean "never sell" narrative that helped define corporate Bitcoin accumulation. Even if Strategy remains a long-term holder, investors must now price both buying and selling risk — an added layer of uncertainty in a market already digesting ETF outflows and weaker macro sentiment.
This article is for informational purposes only and does not constitute investment advice.
