Strategy’s 32-bitcoin sale last week has rattled cryptocurrency markets and could force Michael Saylor to rebuild its dollar reserves to restore confidence among investors, JPMorgan analysts say. The warning comes as the bank has become more cautious about cryptocurrencies, citing weak capital flows, the price of Bitcoin falling below its estimated production cost, and low confidence in US cryptocurrency legislation passed this year.
In a a report Titled Alternative Investments Outlook and Strategy, JPMorgan analysts led by Managing Director Nikolaos Panigirzoglou said Strategy’s small Bitcoin sell-off had a significant signaling effect. The sale was described as “symbolic and voluntary” and intended to demonstrate flexibility and commitment to preferred shareholders. But according to analysts, it still “spooks” markets because it raises a central question for holders of both bitcoin and strategic securities: whether the company can meet its dividend obligations without selling more of its bitcoin corpus.
The strategy needs cash to calm Bitcoin fears
Strategy, formerly known as MicroStrategy, has become the dominant Bitcoin treasury vehicle for companies under Saylor, making its balance sheet decisions a market-wide signal. JPMorgan said the company’s current dollar reserves only cover about 6.3 months of dividend payments, a level that analysts believe may be too thin for investors who already closely monitor the company’s leverage, preferred stock structure and exposure to bitcoin.
“In our view, rebuilding the company’s dollar reserves may be needed to restore confidence and reduce investor fears that the company will sell more bitcoins to cover dividend payments,” the analysts said.
The concern is not that the strategy has abandoned its strategy of buying Bitcoin. JPMorgan still expects the company to continue buying Bitcoin. But the combination of the company’s financing, dividend burden, and limited cash reserve then became more important Sell 32 Bitcoin Show that Bitcoin divestitures, no matter how small, are now part of market risk calculations.
The strategy established a $1.44 billion reserve in December to protect dividend payments Its preferred stock and service benefits On outstanding debts. JPMorgan said the company now needs to clarify how it plans to meet its roughly $1.7 billion in annual dividend payments, especially if bitcoin remains under pressure.
Meanwhile, Saylor pointed to the opposite trend on Sunday, posting on X: “Time is right to add more points.” The strategy currently holds 843,706 BTC at an average cost of $75,699. At current prices approaching $62,000, this position means a paper loss of about $11.5 billion.
JP Morgan said that if the strategy Maintains year-to-date pace of acquisitionsThe company could buy about $32 billion worth of bitcoin in 2026, up from the bank’s previous estimate of $30 billion last month. This can be compared to approximately $22 billion in Bitcoin purchases in 2025 and 2024.
The bank’s broader cryptocurrency outlook has also changed. In February, JP Morgan had an “overweight” and “positive” rating on digital assets for 2026, expecting institutional inflows to push the market higher. Now, analysts are becoming cautious, pointing to weak inflows and a more ambiguous regulatory backdrop.
They said a stronger second half for cryptocurrencies depends on two conditions: a strategy explaining how it will cover profits, and Congress passing the US cryptocurrency market structure bill, known as the Clarity Act. JP Morgan now sees there is less than a 50% chance this legislation will pass this year, citing the narrow window before the US midterm elections, the continuing debate over stablecoin yields, and remaining political hurdles.
Analysts also noted that Bitcoin spent a significant portion of the year below its price Estimated production cost. Their central estimate dropped from $90,000 at the start of the year to $77,000 as hash rate and mining difficulty declined, before rebounding to around $87,000. The cost of production has historically been a “soft floor” for bitcoin, making the current price near $62,000 another reason for caution, they said.
Capital flows tell a similar story. JPMorgan estimates total digital asset flows at about US$22 billion to date, implying an annual pace of about US$52 billion, about half the level recorded in 2025. The estimate includes crypto fund flows, futures positioning on the Chicago Mercantile Exchange, crypto venture capital fundraising, and corporate treasury purchases, including Strategy’s Bitcoin acquisitions.
Despite the cautious stance, JP Morgan left room for a sentiment reversal. Analysts said the current weakness could serve as a “bullish mixed signal going forward.” However, they concluded that a constructive second half “will be contingent on the strategy clarifying its strategy to meet the $1.7 billion annual dividend payments, and agreeing to market structure legislation in the US that we now see as having less than a 50% chance.”
At press time, Bitcoin was trading at $63,071.
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