JPMorgan Critiques Strategy's Bitcoin Sales Policy for Adding Market Risks

On July 2, 2026, JPMorgan released a report stating that Strategy's new bitcoin sales policy has generated considerable "two-way" flow risk, introducing uncertainty into crypto markets. Strategy (MSTR), led by Executive Chairman Michael Saylor, has allowed selective sales of bitcoin to fund preferred dividends, which can affect market liquidity and price stability.

Currently, Strategy maintains a cash reserve of roughly $2.55 billion, covering about 17 months of dividend obligations. However, JPMorgan analysts believe that for a more robust financial position, reserves should extend to 24–36 months. This recommendation implies that issuing common equity might be necessary, even if it means trading at a discount to net asset value (NAV), to reassure investors about the company's long-term sustainability without relying on bitcoin sales.

Strategy has aggressively accumulated a significant bitcoin holding, amassing approximately 847,363 BTC, which constitutes about 4% of the total bitcoin supply. This substantial position in the market means that any indication of selling could raise uncertainty, impacting both investor sentiment and market volatility.

Furthermore, JPMorgan's report connects these dynamics to broader market trends, particularly the softening demand for U.S. spot bitcoin exchange-traded funds (ETFs). After experiencing record net outflows of $4 billion in June, the ETF market has been under pressure, which, according to JPMorgan, adds another layer of complexity to bitcoin's market performance. The report noted that as Strategy disclosed its minor bitcoin sales to fund dividend payments, bitcoin's price faced pressure, exacerbating the market's overall challenges.

'Given the size of Strategy's holdings, both buying and selling action could create unnecessary two-way flow risks,' JPMorgan analysts stated, highlighting how increased price volatility could hinder the company's future funding capabilities for bitcoin purchases.

Market sentiment could change positively if Strategy boosts its cash reserves and ongoing discussions in Congress regarding crypto market structure legislation yield favorable outcomes. A more secure financial footing aligned with favorable regulatory frameworks could enhance potential investor confidence moving forward.