JPMorgan analysts say Strategy’s last week sale of 32 bitcoin unsettled crypto markets and may force Michael Saylor’s company to rebuild its dollar reserves to restore confidence among investors. The warning comes as the bank turns more cautious on crypto, citing weaker capital flows, bitcoin’s break below estimated production cost, and reduced confidence in US crypto legislation passing this year.
Strategy Needs Cash To Calm Bitcoin FearsStrategy, formerly MicroStrategy, has become the dominant corporate bitcoin treasury vehicle under Saylor, making its balance-sheet decisions a market-wide signal. JPMorgan said the company’s current dollar reserves cover only around 6.3 months of dividend payments, a level the analysts believe may be too thin for investors who are already watching the firm’s leverage, preferred stock structure and bitcoin exposure closely.
“In our opinion a rebuilding of the company’s dollar reserves might be needed to restore confidence and reduce investor concerns that the company would sell more bitcoins to cover dividend payments,” the analysts said.
Saylor, meanwhile, signaled the opposite direction on Sunday, posting on X: “A good time to add more dots.” Strategy currently holds 843,706 bitcoin at an average cost of $75,699. At current prices near $62,000, that position implies a paper loss of roughly $11.5 billion.
The bank’s broader crypto outlook has also shifted. In February, JPMorgan was “overweight” and “positive” on digital assets for 2026, expecting institutional flows to drive the market higher. Now, the analysts have turned cautious, pointing to weaker inflows and a more uncertain regulatory backdrop.
A stronger second half for crypto, they said, depends on two conditions: Strategy explaining how it will cover dividends, and Congress passing the US crypto market structure bill, known as the Clarity Act. JPMorgan now sees less than a 50% chance of that legislation passing this year, citing a narrowing window ahead of the US midterm elections, continued debate around stablecoin yield, and remaining political hurdles.
Capital flows tell a similar story. JPMorgan estimates total digital asset inflows at around $22 billion year-to-date, implying an annualized pace of roughly $52 billion, about half the level recorded in 2025. The estimate includes crypto fund flows, CME futures positioning, crypto venture capital fundraising and corporate treasury purchases, including Strategy’s bitcoin acquisitions.
Despite the cautious stance, JPMorgan left room for a reversal in sentiment. The analysts said the current weakness could prove a “bullish contrarian signal going forward.” Still, they concluded that a constructive second half “would be conditional on Strategy clarifying its strategy [for] meeting dividend payments of $1.7 billion a year and on the approval of the US market structure legislation for which we now see less than 50% chance.”
At press time, BTC traded at $63,071.
