JPMorgan sees Strategy reserve shortfall as key risk for Bitcoin investors

Michael Saylor’s Strategy has seen JPMorgan turn cautious on digital assets, with the bank warning that the company may need to rebuild its $ reserves as annual dividend obligations reach about $1.7 billion.

According to a Friday report from JPMorgan analysts led by Managing Director Nikolaos Panigirtzoglou, investor concerns increased after Strategy sold 32 Bitcoin between May 26 and May 31, even though the bank described the transaction as symbolic and voluntary.

The analysts said the sale appeared intended to demonstrate flexibility and commitment to preferred stockholders. Even so, they argued that the move raised questions about how Strategy plans to fund future dividend payments without relying on its Bitcoin holdings.

JPMorgan estimated that Strategy’s remaining dollar reserves cover only about 6.3 months of dividend payments. Strategy had established a $1.44 billion reserve in December to support preferred stock dividends and service interest payments on outstanding debt.

In the report, the analysts said restoring confidence may require Strategy to replenish those reserves, reducing concerns that additional Bitcoin sales could be needed to meet future obligations.

Hours after those concerns surfaced, Strategy co-founder and Executive Chairman Michael Saylor hinted at another Bitcoin purchase, posting on X that it was “a good time to add more dots.”

Strategy currently holds 843,706 Bitcoin acquired at an average price of $75,699. JPMorgan estimated the position represents an unrealized loss of roughly $11.5 billion at current market prices.

Bitcoin buying expected to continue

Despite concerns about reserves, JPMorgan said it still expects Strategy to remain an active Bitcoin buyer.

Based on the company’s acquisition pace so far this year, the analysts projected around $32 billion in Bitcoin purchases during 2026, up from approximately $22 billion in both 2024 and 2025. The estimate was revised higher from the bank’s previous forecast of $30 billion issued last month.

Recent debate over Strategy’s funding model has also drawn responses from industry figures. Earlier this month, BTCTOP CEO Jiang Zhuoer said he does not expect Strategy to become a significant net seller of Bitcoin even during a severe market decline.

In comments posted on X, Jiang argued that Strategy’s reputation as a long-term Bitcoin holder carries substantial value and that large-scale sales would damage the company’s public image. He also said a drop in Bitcoin to $30,000 would raise Strategy’s leverage ratio from roughly 5% to around 10%, which he described as manageable.

Jiang further suggested that Strategy could sell older, lower-cost Bitcoin to realize accounting gains and help cover STRC dividend obligations while continuing to acquire Bitcoin through new capital raised from investors.

Those comments contrasted with warnings previously raised by Grayscale, which said weakness in both MSTR shares and STRC preferred stock could make fundraising more difficult and increase pressure on the company’s financing model.

JPMorgan cuts confidence in crypto outlook

Elsewhere in its latest outlook, JPMorgan lowered its expectations for crypto market developments that it previously viewed as supportive for digital assets.

The analysts now assign less than a 50% probability that the U.S. crypto market structure legislation, known as the CLARITY Act, will pass this year. Earlier this week, JPMorgan said the bill faces a narrowing legislative window as midterm elections approach and debates over stablecoin yield provisions continue.

A positive second half for digital assets would depend partly on clarity around Strategy’s dividend funding plans and progress on market structure legislation, according to the bank.

JPMorgan’s latest stance contrasts with its February outlook, when the analysts said they were overweight and positive on digital assets for 2026 because they expected institutional investors to drive stronger inflows into the sector.

The bank also pointed to weaker capital entering crypto markets this year. JPMorgan estimates digital asset inflows at roughly $22 billion year to date, which translates to an annualized pace of about $52 billion, nearly half the level recorded in 2025. The calculation includes crypto fund flows, CME futures positioning, venture capital fundraising and corporate treasury purchases such as Strategy’s Bitcoin acquisitions.

Bitcoin’s production cost also remains an important metric in the bank’s analysis. JPMorgan said its central estimate fell from $90,000 at the start of the year to $77,000 before recovering to about $87,000 as mining conditions changed. Historically, the bank noted, production cost has often acted as a support level for Bitcoin prices.

Even after adopting a more cautious outlook, JPMorgan said the current pessimism across crypto markets could become a bullish contrarian signal if market conditions improve later in the year.