JPMorgan Raises Concerns About Strategy’s Bitcoin Funding Model
JPMorgan analysts have become more cautious on both the crypto market and the financing structure of Strategy, warning that the company may need to rebuild its cash reserves to reassure investors that future dividend payments will not require additional Bitcoin sales.
Why JPMorgan Is Concerned
The discussion intensified after Strategy sold 32 BTC between May 26 and May 31. While JPMorgan described the sale as small and largely symbolic, it marked a departure from the company’s long-standing image as a pure Bitcoin accumulator.
According to analysts led by Nikolaos Panigirtzoglou:
- Strategy’s remaining dollar reserves cover only about 6.3 months of dividend obligations.
- Annual preferred-stock dividend commitments are estimated at approximately $1.7 billion.
- Investors may worry that future dividend payments could eventually require Bitcoin sales if reserves are not replenished.
The bank believes rebuilding cash reserves would help reduce fears that Strategy may become a forced seller of Bitcoin during periods of financial stress.
Strategy’s Bitcoin Position Remains Massive
Strategy currently holds:
- 843,706 BTC
- Average acquisition cost: approximately $75,699 per Bitcoin
Despite recent market weakness, the company remains the largest corporate Bitcoin holder globally. JPMorgan estimates the position currently carries an unrealized loss of roughly $11.5 billion based on prevailing market prices.
JPMorgan Still Expects More Bitcoin Purchases
Interestingly, JPMorgan remains bullish on Strategy’s ability to continue accumulating Bitcoin despite its concerns.
The bank projects:
| Year | Estimated BTC Purchases |
|---|---|
| 2024 | ~$22 billion |
| 2025 | ~$22 billion |
| 2026 | ~$32 billion |
That forecast is actually higher than JPMorgan’s previous estimate of $30 billion for 2026.
Meanwhile, Michael Saylor appeared to hint at another purchase shortly after the report, posting on social media that it was “a good time to add more dots”—a phrase often interpreted by Bitcoin investors as a signal of upcoming acquisitions.
Industry Debate: Will Strategy Ever Need to Sell?
Not everyone shares JPMorgan’s concerns.
Jiang Zhuoer recently argued that Strategy is unlikely to become a significant net seller of Bitcoin, even during a severe market downturn.
His reasoning includes:
- Strategy’s reputation as a long-term Bitcoin holder is a valuable corporate asset.
- Large-scale selling could damage investor confidence.
- Even if Bitcoin fell to $30,000, he believes the company’s leverage would remain manageable.
- Strategy could selectively sell older low-cost Bitcoin to realize accounting gains while continuing to acquire new Bitcoin through fundraising.
However, critics—including analysts at Grayscale Investments—have warned that weaker performance in Strategy’s stock and preferred securities could eventually make capital raising more difficult.
JPMorgan Also Turns More Cautious on Crypto
The report extends beyond Strategy itself.
JPMorgan now estimates:
- Less than a 50% probability that the U.S. crypto market structure bill known as the CLARITY Act will pass this year.
- Digital asset inflows are running at an annualized pace of roughly $52 billion, nearly half of 2025 levels.
- Institutional capital entering crypto markets has slowed noticeably.
The bank previously held a much more optimistic view at the start of 2026.
Bitcoin Production Cost Remains Important
One metric JPMorgan continues to monitor is Bitcoin’s estimated production cost.
The bank estimates:
- Start of 2026: ~$90,000
- Mid-year low: ~$77,000
- Current estimate: ~$87,000
Historically, JPMorgan notes that Bitcoin’s production cost has often acted as an important long-term support reference, though it does not guarantee a price floor.
Bottom Line
JPMorgan’s concern is not that Strategy is in immediate danger. Rather, the bank is focused on a longer-term question: Can Strategy continue paying roughly $1.7 billion in annual obligations while maintaining its identity as a company that rarely sells Bitcoin?
For now, JPMorgan still expects substantial Bitcoin purchases from Strategy. However, investors will be watching two issues closely over the coming months:
- Whether Strategy rebuilds its cash reserves.
- Whether U.S. crypto legislation such as the CLARITY Act advances, improving the broader outlook for digital assets.
If those concerns ease while market sentiment remains pessimistic, JPMorgan suggests the current negativity could ultimately become a contrarian bullish signal for crypto markets.
