Strategy may need to rebuild its dollar reserves to restore investor confidence and reduce concerns about future bitcoin sales, according to JPMorgan analysts who have turned cautious on digital assets. The analysts said Strategy's current dollar reserves cover only about 6.3 months of dividend payments, adding to investor concerns following the company's recent decision to sell 32 bitcoin. Strategy established a $1.44 billion U.S. dollar reserve in December to safeguard dividend payments on its preferred stock and service interest on outstanding debt, but the analysts noted in a report published Friday that rebuilding these reserves might be needed to reduce concerns the company would sell more bitcoin to cover its $1.7 billion in annual dividend payments.
Strategy's Dollar Reserve Coverage Raises Investor Concerns
Strategy's recent decision to sell 32 bitcoin spooked markets even though the sale was symbolic and voluntary, intended to demonstrate the company's commitment and flexibility to preferred stockholders, according to JPMorgan analysts led by managing director Nikolaos Panigirtzoglou. The analysts said the company's current dollar reserves cover only about 6.3 months of dividend payments. Strategy established a $1.44 billion U.S. dollar reserve in December to safeguard dividend payments on its preferred stock and service interest on outstanding debt.
Strategy Holds 843,706 Bitcoin With $11.5 Billion Paper Loss
Strategy currently holds 843,706 bitcoin at an average cost of $75,699, representing a paper loss of about $11.5 billion at current prices. Earlier Sunday, Michael Saylor, Strategy's co-founder and executive chairman, hinted at a fresh bitcoin buy, posting on X: "A good time to add more dots." Bitcoin is currently trading at around $62,000.
JPMorgan Projects $32 Billion Strategy Bitcoin Purchases in 2026
The JPMorgan analysts expect Strategy to continue buying bitcoin. If its year-to-date pace continues, it would imply around $32 billion of bitcoin purchases in 2026, compared with roughly $22 billion in both 2025 and 2024, the analysts said, revising their estimate from $30 billion last month. The analysts said a positive second half of the year would be conditional on Strategy clarifying its strategy for meeting dividend payments of $1.7 billion a year and the passage of the crypto market structure bill, or Clarity Act.
JPMorgan Sees Less Than 50% Chance of Crypto Bill Passage
The analysts now see less than a 50% chance of the Clarity Act passing this year. Earlier this week, they said the legislation may have only a narrow window for passage as U.S. midterm elections approach, the stablecoin yield debate continues and key hurdles remain. In an earlier report published in February, the analysts said they were overweight and positive on digital assets for 2026 as they expected a further rise in crypto flows led by institutional investors. The rebound in institutional flows was expected to be supported by the passage of additional crypto regulations, including the Clarity Act.
Digital Asset Inflows Fall to $52 Billion Annualized Pace
The analysts have now turned cautious on digital assets overall. They pointed to weaker capital flows into digital assets this year, estimating total digital asset inflows at around $22 billion year-to-date, implying an annualized pace of roughly $52 billion, about half the level seen in 2025. The estimate includes crypto fund flows, CME futures positioning, crypto venture capital fundraising and corporate treasury purchases of digital assets, including Strategy's bitcoin acquisitions.
The analysts also noted that bitcoin has spent most of this year trading below their estimated production cost. Their central bitcoin production cost estimate fell from $90,000 at the start of the year to $77,000 as hashrate and mining difficulty declined, before rebounding to about $87,000 more recently. Historically, the analysts said bitcoin's production cost has tended to act as a soft floor, or support level, for the bitcoin price.
Despite turning cautious, the analysts said the current weak sentiment in crypto markets might prove a bullish contrarian signal going forward. A positive second half of the year would be conditional on Strategy clarifying its strategy for meeting dividend payments of $1.7 billion a year and on the approval of the U.S. market structure legislation for which we now see less than 50% chance, the analysts concluded.
FAQ
Why did JPMorgan analysts turn cautious on Strategy?
JPMorgan analysts turned cautious because Strategy's dollar reserves cover only about 6.3 months of dividend payments, and the company's recent sale of 32 bitcoin spooked markets. The analysts said Strategy may need to rebuild its $1.44 billion dollar reserve to restore investor confidence and reduce concerns about future bitcoin sales to cover its $1.7 billion in annual dividend obligations.
How much bitcoin does Strategy currently hold?
Strategy currently holds 843,706 bitcoin at an average cost of $75,699, representing a paper loss of about $11.5 billion at current prices of around $62,000. JPMorgan analysts project Strategy could purchase around $32 billion of bitcoin in 2026 if its year-to-date pace continues, compared with roughly $22 billion in both 2025 and 2024.
What is JPMorgan's outlook on the crypto market structure bill?
JPMorgan analysts now see less than a 50% chance of the Clarity Act passing this year. They said the legislation may have only a narrow window for passage as U.S. midterm elections approach, the stablecoin yield debate continues and key hurdles remain. The analysts said a positive second half for digital assets would be conditional on the bill's approval and Strategy clarifying its dividend payment strategy.
