JPMorgan Warns Strategy Bitcoin Sales Policy Introduces Two-Way Risk
JPMorgan analysts warned that Strategy’s new capital framework introduces avoidable two-way risk into cryptocurrency markets by allowing the company to sell Bitcoin to fund operations, potentially increasing price volatility. The bank recommended that the firm, formerly known as MicroStrategy, raise capital through equity issuance rather than selling its Bitcoin holdings to build 24 to 36 months of dividend coverage on its STRC preferred shares. JPMorgan noted that Strategy currently holds enough cash reserves to cover approximately 17 months of dividend obligations.
The commentary follows Strategy’s disclosure of a revised corporate objective for its STRC shares to trade at $99 to $100, a policy aimed at stabilizing the instrument after recent selling pressure. Bitwise Chief Investment Officer Matt Hougan echoed the bank’s assessment, stating that the company’s updated capital structure means it is no longer solely a net buyer of Bitcoin. Hougan characterized the recent volatility in STRC and the broader pullback in MSTR shares as a typical end-of-cycle deleveraging phase, suggesting that excess leverage is being flushed from the crypto market.
From the sources (10 posts)
@saylorAs Strategy disclosed Monday: our corporate objective is for $STRC to trade over time at $99–$100.
@trustlessstateRT @Bankless: At what price would @jdorman81 actually buy $STRC for a fund? “Not unless this thing gets to 30 or 40¢ on the dollar and you…
@laurashinThis Monday, most people were expecting that Strategy had tapped the ATM, raised a hundred million dollars and maybe did an announcement about the other preferreds trading below par. But what they did was much more comprehensive and strengt
@laurashinDavid Lawant on why this week was marked by stabilization for STRC and SATA even as Bitcoin remains under pressure "STRC was trading at $75 before the announcement. It has recovered to the mid eighties. We are still very far from par. The
@theblockcoTHE BLOCK: JPMorgan analysts say Strategy's new bitcoin sale policy introduces what it calls "two-way flow risk," adding uncertainty and volatility to crypto markets. $MSTR The analysts noted Strategy's current cash reserves cover about 17
@crypto_briefing🚨 JUST IN: JPMorgan warns that Strategy’s new Bitcoin sales policy introduces “two-way risk” to crypto markets, recommending the firm build 24–36 months of dividend coverage through equity issuance rather than selling bitcoin:native https:/
@coindeskUST IN: @JPMorgan warns @Strategy's new $BTC sales policy introduces "two-way risk" to crypto markets, recommending the firm build 24-36 months of dividend coverage via equity issuance rather than selling Bitcoin.
@wublockchainBitwise CIO: Strategy Is No Longer Just a One-Way Bitcoin Buyer Bitwise CIO Matt Hougan said Strategy is no longer just a one-way source of Bitcoin demand, arguing the company’s new capital framework gives it flexibility to monetize BTC wh
@coinmarketcapLATEST: 📊 Bitwise CIO Matt Hougan says Strategy’s STRC selloff reflects classic end-of-cycle deleveraging and expects a new Bitcoin bull market to begin this fall.
@coinmarketcapLATEST: 📊 JPMorgan analysts say Strategy's new Bitcoin sale policy introduces "avoidable two-way risk" into crypto markets, warning it could fuel more volatility than issuing equity instead.