JPMorgan explained that the new policy, which allows Strategy to selectively sell some of its Bitcoin holdings, could pose additional risk in the crypto market. The bank evaluates that the company, which has been one of the most stable buyers on the Bitcoin side for years, being in a position to sell when necessary, will make the market flow two-way.
New policy and JPMorgan’s objection
On Monday, Strategy announced a program to convert some of its 847,363 BTC reserves into cash. In this context, the company aims to support buybacks with preferential dividend payments. Strategy, formerly known as MicroStrategy, is a US-based company that has long stood out with its extensive holding of Bitcoin on its balance sheet.
In their assessment published on Wednesday, led by Nikolaos Panigirtzoglou, JPMorgan analysts state that this approach adds an avoidable two-way flow risk to the crypto market. According to analysts, Strategy alone accounted for approximately 70% of net digital asset inflows this year, and therefore the company’s buying weight has become an important balancing factor in the market.
JPMorgan analysts emphasize that the fact that Strategy, which has been one of the most stable buyers of Bitcoin for years, can now switch to the sell side when necessary, creates a new uncertainty in the market.
Cash buffer debate
JPMorgan argues that it would be more appropriate for Strategy to increase its cash reserves through the issuance of common shares to strengthen investor confidence. According to the bank, this step could reduce concerns that the company will not have to sell Bitcoin in the near term.
Strategy currently has $2.55 billion in cash. This amount is enough to cover the preferential dividend and interest obligations for approximately 17 months. JPMorgan, on the other hand, thinks that this does not offer a sufficient protection area.
It is stated that a cash coverage period of 24 to 36 months is needed for a higher margin of confidence, so that investors can feel more comfortable that there will be no need to sell Bitcoin in the foreseeable future.
Research institutions were divided into two
Not all evaluations in the market are in the same direction. Benchmark Equity Research maintained its buy recommendation on MSTR and reiterated its $570 target price following the announcement of the sell policy. This level indicates more than 500% upside from recent prices.
Benchmark analyst Mark Palmer sees the new capital framework as formal flexibility that allows Strategy to run its capital structure in reverse during periods of increased market pressure. Palmer thinks this approach could be a net positive for shareholders.
There was a sharp rise in stocks
MSTR stock rose following the new policy. The stock rose 12.6% to $92.68 on Monday. STRC, on the other hand, rose nearly 10% to around $83.67 after trading below $75 the previous week.
| Presence | Period | Level | Change |
|---|---|---|---|
| MSTR | Near Monday close | $92.68 | 12.6% increase |
| STRC | Monday | About $83.67 | Approximately 10% increase |
| MSTR | Wednesday | over $100 | 27% up from Friday’s bottom |
On Wednesday, MSTR rose above $100, up 27% from Friday’s low and adding nearly $5 billion to the company’s market value. In the last transaction data, the stock changed hands at $ 100.83, while the daily increase was 7.93%.
