JPMorgan warns Strategy’s policy allowing selective Bitcoin sales could add volatility to crypto markets

JPMorgan Chase is warning that a recent shift by Strategy Inc. to formalize the option to sell some of its Bitcoin holdings could make crypto markets more volatile. In a note cited by multiple financial outlets, JPMorgan analysts argued that Strategy’s policy turns its Bitcoin treasury into a potential source of both support and selling pressure, depending on timing and market conditions.

The concern centers on Strategy’s capital structure plan, which includes preferred stock and dividend obligations. According to reporting on JPMorgan’s view, Strategy’s new framework allows “selective” Bitcoin sales as a funding source for preferred dividend payments, rather than relying solely on cash and other financial mechanisms.

JPMorgan said the policy creates avoidable market uncertainty by introducing what it characterized as “two-way risk” into Bitcoin. In this framing, the possibility of future sales can affect how investors interpret downside protection and liquidity, while the prospect of stability can still draw in leverage. The bank’s analysts argued that the combination can increase the odds of abrupt shifts in sentiment, particularly during stress.

On cash coverage, JPMorgan’s analysts pointed to Strategy’s stated minimum cash reserve target. Reporting on the bank’s assessment said Strategy set a minimum reserve equal to 12 months of preferred dividends and interest expense. JPMorgan then compared that buffer with what investors might need to feel confident that Strategy would not need to sell Bitcoin in the foreseeable future.

Based on the figures cited in the reporting, Strategy’s current reserve was described as about $2.55 billion, covering roughly 17 months of the relevant obligations. JPMorgan’s analysts said they believe coverage in the 24 to 36 month range would be needed, even if it means issuing common equity at a discount to net asset value, to give investors more comfort about the company’s liquidity plan.

The bank’s bottom line was not only about Strategy’s treasury mechanics but also about what the policy indicates for market structure. JPMorgan’s view, as summarized in the coverage, is that when a large corporate Bitcoin holder makes sales policy explicit and finance-driven, market participants can begin pricing that option into Bitcoin’s risk profile rather than treating it as incidental.

Strategy has become one of the largest corporate holders and buyers of Bitcoin, and its approach is closely watched by both crypto traders and traditional investors. In that context, JPMorgan’s warning matters less as a direct call about Strategy’s performance and more as an attempt to quantify how corporate balance-sheet decisions can feed into trading dynamics.

Still, the outlets reporting JPMorgan’s stance do not provide full detail on how frequently, under what triggers, and at what scale Strategy would actually sell Bitcoin under the policy. JPMorgan’s discussion also appears to focus on investor confidence and market behavior rather than any new regulatory finding, and it does not spell out any official next step by JPMorgan beyond its analytical view. Investors looking for clarity on timing and execution will likely need to rely on Strategy’s own disclosures about how the policy works in practice.