JPMorgan analysts warned that Strategy’s new Bitcoin sales policy adds two-way flow risk to crypto markets, replacing a one-way accumulation model with a structure that can include selective BTC sales.
The analysts, led by Nikolaos Panigirtzoglou, tied the two-way flow risk to Strategy’s ability to sell Bitcoin for preferred-stock dividends, interest expense, USD Reserve funding and securities repurchases. The bank said the policy adds market uncertainty because Strategy has been one of Bitcoin’s largest corporate buyers.
Strategy’s BTC monetization program authorizes Bitcoin sales for three listed purposes: generating up to $1.25 billion to fund the USD Reserve, funding or replenishing preferred-stock dividends and debt interest, and funding repurchases of Digital Credit Securities or MSTR common stock.
The authorization does not require Strategy to sell Bitcoin. BTC monetization remains subject to market conditions, liquidity needs, tax and accounting considerations, legal requirements and management’s assessment of long-term shareholder value.
Cash Reserve Coverage Becomes JPMorgan’s Focus
Strategy listed a USD Reserve of about $2.55 billion as of June 28. That reserve covers about 17.4 months of current annual preferred-stock dividends and interest expense, based on expected annual payments of about $1.76 billion.
The same framework gives Strategy about 25.9 months of liquidity coverage when the $2.55 billion USD Reserve is combined with $1.25 billion of board-authorized BTC monetization capacity. JPMorgan said a larger 24-to-36-month cash reserve would make investors more comfortable that Strategy would not need to sell Bitcoin in the foreseeable future.
Strategy’s Digital Credit framework also raised STRC’s annual dividend rate to 12% for semi-monthly periods with record dates on or after July 1. STRC dividends remain subject to board declaration and are not guaranteed.
The framework followed weeks of pressure around MSTR, STRC and Strategy’s preferred-stock complex. Grayscale Research chief Zach Pandl had argued that a Strategy Bitcoin sale could restore confidence if it reduced balance-sheet uncertainty, while Mike Novogratz pushed back on forced-seller fears before the company formalized the new liquidity policy.
Strategy Still Holds More Than 847K BTC
Strategy holds 847,363 BTC, acquired at an average purchase price of $75,651 per coin. JPMorgan estimated that the company controls about 4% of Bitcoin’s total supply and remains one of the largest single sources of corporate BTC demand.
The bank also cited Strategy’s 32 BTC sale between May 26 and May 31, which was used to help fund dividend payments. That small sale became the first disclosed Strategy BTC sale since the company’s 2022 tax-loss transaction and preceded the wider June 29 BTC monetization authorization.
MSTR recently traded near $99.65, with an intraday range between $94.39 and $104.06. Bitcoin traded near $61,684, with an intraday range between $59,541 and $62,056.
As of July 2, Strategy’s BTC monetization authorization remained capped at $1.25 billion for USD Reserve funding, with additional Bitcoin sales outside the listed purposes requiring further board authorization.
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