JPMorgan Warns Strategy Must Rebuild Its Dollar Reserves

JPMorgan analysts are warning that Strategy, the world's largest corporate bitcoin holder, may need to rebuild its dollar reserves to restore investor confidence after a small bitcoin sale rattled markets earlier this year.

When Michael Saylor's company sold 32 bitcoin, the trade was not large by any measure. But the sale raised questions about whether Strategy was beginning to feel financial pressure, and JPMorgan's latest note gives those questions specific numbers.

The reserve problem

Strategy's current dollar reserves cover only about 6.3 months of dividend payments, a cushion analysts describe as thin given the company's obligations. JPMorgan analysts, led by managing director Nikolaos Panigirtzoglou, wrote in the bank's latest Alternative Investments Outlook and Strategy report that rebuilding dollar reserves might be necessary to reduce investor concern that the company would sell more bitcoin to cover dividend payments.

Strategy set aside $1.44 billion in U.S. dollar reserves in December, specifically to safeguard dividend payments on its preferred stock and service interest on outstanding debt. Annual dividend obligations run at $1.7 billion, and that gap is why the reserve level is being watched closely, a dynamic not unlike the balance-sheet pressure that shaped Morgan Stanley's move into lower-fee Ethereum and Solana ETFs.

Strategy currently holds 843,706 bitcoin, acquired at an average cost of $75,699 per coin. With bitcoin trading around $62,000, that position carries a paper loss of roughly $11.5 billion. Despite that, JPMorgan analysts still expect the company to keep buying. If its year-to-date pace holds, Strategy could acquire around $32 billion worth of bitcoin in 2026, up from approximately $22 billion in each of the two prior years.

JPMorgan turns more cautious

Beyond Strategy, JPMorgan's broader stance on digital assets has shifted from overweight and positive at the start of the year to notably more guarded. Capital flowing into digital assets has slowed meaningfully, with total inflows running at roughly $22 billion year-to-date, which annualizes to about $52 billion, nearly half the pace seen in 2025. The decline spans crypto fund flows, futures positioning, venture capital, and corporate treasury buying, a slowdown that mirrors the caution building around infrastructure spending elsewhere, including how businesses are working to accept crypto payments without taking on price risk.

Bitcoin has spent much of the year trading below what analysts estimate as its production cost, currently sitting around $87,000 after earlier dipping closer to $77,000. That production cost has historically acted as an informal floor for bitcoin's price, and trading consistently below it is, by JPMorgan's own framing, unusual.

The regulatory wildcard

The fate of U.S. crypto legislation adds another layer of uncertainty. JPMorgan analysts argue that a stronger second half of the year depends on two things: Strategy clarifying how it intends to meet its dividend obligations, and Congress passing the crypto market structure bill known as the Clarity Act. On the legislative front, the bank now puts the odds of passage this year below 50%, citing the approaching midterm election cycle, unresolved debates around stablecoin yields, of the kind explored in how stablecoins are becoming the internet's settlement layer, and legislative hurdles that remain firmly in place.

A possible contrarian signal

The picture is not entirely bleak. JPMorgan analysts acknowledged that the current weakness in crypto sentiment could itself become a catalyst, describing it as a potential contrarian signal going forward. Markets are looking for clarity on Strategy's financial footing and regulatory progress from Washington. Until those pieces fall into place, caution remains the dominant mood.