JPMorgan warned that MicroStrategy’s new Bitcoin sales policy adds unnecessary risk to the crypto market. The Michael Saylor-led firm may sell up to $1.25 billion in Bitcoin to fund preferred dividends across the coming months.

The warning arrives as Strategy (formerly MicroStrategy) loses ground on both its common and preferred stock across broader financial markets.

Why JPMorgan Sees Two-Way Risk in MicroStrategy’s Plan

A two-way risk is a scenario in which price moves in either direction can create potential losses for market participants exposed to the underlying asset. JPMorgan analysts led by Nikolaos Panigirtzoglou say Strategy’s new Bitcoin sales policy has now introduced exactly that dynamic into the crypto market.

MicroStrategy revealed the option to sell up to $1.25 billion in Bitcoin to strengthen its balance sheet. Furthermore, the company could also authorize preferred stock repurchases and share buybacks. The move follows a period of stress on both MSTR common shares and its preferred series.

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The company also set a new minimum cash reserve target. Strategy now aims to cover 12 months of preferred dividends and interest expense.

However, its current $2.55 billion in reserves only covers 17 months of obligations, leaving limited flexibility in the coming quarters.

JPMorgan pushed back hard on the approach. Analysts recommended a higher coverage target of 24-36 months. Moreover, they urged MicroStrategy to issue common equity to expand dollar reserves. That would reassure investors that the firm will not need to sell Bitcoin going forward.

Strategy remains the largest Bitcoin buyer globally. The firm has purchased roughly $13.7 billion of Bitcoin in 2026 alone and holds 847,363 BTC.

As a result, whether it buys or sells, the movement now creates significant unnecessary flow risk across the broader crypto market environment.

How Bitcoin and MSTR Are Digesting the Fresh Risks

Strategy’s May Bitcoin sale sent ripples across the market. The company sold 32 Bitcoin for approximately $2.5 million between May 26 and May 31. Furthermore, the move marked its first Bitcoin sale since 2022, a sharp reversal from Michael Saylor’s public “never sell” stance.

JPMorgan flagged the direct market impact of that transaction. The bank noted that MicroStrategy’s sale contributed to Bitcoin’s stress in late May and early June. Moreover, greater price volatility could ultimately hurt the company itself, raising the cost of future equity and debt financings.

MSTR stock has slid 34% this year to $100.77. Its STRC preferred series follows the same pattern, down 12% at $87.09. Bitcoin also trades under pressure, off 30% year-to-date at $61,486.

However, JPMorgan analysts see a potential contrarian angle. The current bearish sentiment could set up a stronger second half if two conditions align. Strategy must expand dollar reserves. Moreover, the United States must approve the CLARITY Act to unlock renewed institutional flows.

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Source: BeInCrypto