JPMorgan Sounds Warning Over Strategy's Bitcoin Sales Plan

Strategy Inc., a prominent Bitcoin accumulator, has undergone significant changes to its financial structure. As part of its BTC Monetization Program, the company is now authorized to liquidate up to $1.25 billion in Bitcoin holdings to boost cash reserves and satisfy preferred equity dividend commitments.

The move has raised concerns among analysts at JPMorgan, who warn that Strategy's updated policy creates 'avoidable two-way risk' for cryptocurrency investors. This is because the company controls approximately 4.2% of all Bitcoin in circulation and has purchased between $8.2 billion and $13.7 billion in digital assets this year, representing roughly 70% of total net inflows.

JPMorgan analysts believe that Strategy requires cash buffers sufficient for 24-36 months of dividend payments, substantially more than its present ~17-month coverage. They argue that a higher coverage would make investors more comfortable with the idea that Strategy wouldn't need to sell Bitcoins in the foreseeable future, thereby avoiding market uncertainty and volatility.

Strategy's shares have experienced a significant decline of approximately 75% year-over-year, while Bitcoin gained 3.4% on Thursday to reach $62,127.