JPMorgan said Strategy’s decision to allow selective bitcoin sales to fund preferred stock dividends has introduced what it is describing as “two-way risk” into crypto markets, a shift tied to the company’s evolving capital structure and its large bitcoin holdings.
Strategy has formalized a policy that permits limited bitcoin sales when needed to meet dividend obligations, alongside authorizing share buybacks and preferred stock repurchases as part of its broader capital strategy. The company has also set a minimum cash reserve target equal to 12 months of preferred dividends and interest expenses, with current reserves reported at about $2.55 billion, covering roughly 17 months of obligations, Coindesk reported.
A separate disclosure of the updated framework shows Strategy has structured the policy to allow up to $1.25 billion in potential bitcoin sales alongside a $1 billion common stock buyback program, marking a broader shift in how the company manages liquidity across its capital base.
JPMorgan analysts led by Nikolaos Panigirtzoglou said a higher reserve buffer, closer to 24 to 36 months of coverage, would provide greater comfort that Strategy would not need to sell bitcoin in the near term. The bank noted that strengthening reserves through additional equity issuance could improve balance sheet stability even if it affects valuation metrics tied to net asset value, the Coindesk report said.
Strategy, formerly MicroStrategy, holds 847,363 bitcoin, making it one of the largest corporate holders of the cryptocurrency. Its accumulation strategy has positioned the company as a major source of bitcoin demand in recent years, with holdings estimated at roughly 4% of total supply, Bitcoin.com News reported.
JPMorgan said the updated structure effectively places Strategy in a position where it may act as both a buyer and occasional seller of bitcoin depending on funding requirements, introducing opposing flows into the market that can influence liquidity conditions.
Earlier disclosures showed Strategy sold 32 bitcoin between May 26 and May 31 to help fund dividend payments, marking one of the few instances of direct sales in recent years outside of routine adjustments, according toCoinMarketCap Academy.
The company’s bitcoin strategy has been largely supported by capital markets activity, including equity issuance that has funded large-scale purchases over time, linking its balance sheet performance closely to both bitcoin prices and investor demand for its stock.
Broader crypto market conditions have also been influenced by shifts in institutional demand, including periods of net outflows from U.S. spot bitcoin exchange-traded funds since mid-2026, adding another layer of pressure on market liquidity, the Coindesk report added.