JPMorgan Warns Strategy Must Rebuild Cash Reserves

JPMorgan has warned that Strategy, the largest corporate holder of $BTC, may need to rebuild its dollar reserves to restore investor confidence, according to a report by The Block. The caution from Wall Street comes after the company's first net Bitcoin sale in four years rattled markets despite its negligible size.

A Small Sale With an Outsized Signal

Strategy sold 32 $BTC between May 26 and May 31, raising approximately $2.5 million at an average price of $77,135 per coin. The sale was disclosed in an SEC 8-K filing on June 1, causing MSTR shares to drop around 6%. The proceeds were directed entirely toward funding distributions on the company's preferred stock, making it a dividend obligation rather than a strategic exit.

Strategy's sale of 32 bitcoin "spooked" markets, and the company may need to rebuild its dollar reserves to restore confidence and reduce investor concerns, JPMorgan analysts said. JPMorgan's analysis suggests the transaction backfired, creating uncertainty rather than reassurance, with the bank noting that the sale, while small in volume, sent a negative signal to a market already grappling with subdued inflows and regulatory ambiguity.

Analysts broadly agree that the 32-BTC sale was immaterial, though what remains up for debate is whether it was simply a routine treasury decision or an early signal about Strategy's approach to managing its vast bitcoin reserves. Benchmark analyst Mark Palmer said he does not expect bitcoin disposals to become a primary source of funding for dividends, stating the firm does not expect Strategy to use bitcoin sales as a primary means of funding dividends on STRC and its other perpetual preferred stock issues.

Reserve Coverage Raises Concern

JPMorgan advises Strategy to increase its U.S. dollar reserves, which currently cover only about six months of dividend payments, to restore investor confidence. In December 2025, Strategy established a $2.25 billion cash reserve specifically to cover dividends and debt repayments, sufficient to last approximately 30 months at the then-current rate. By May 31, 2026, that reserve had declined to $900 million, with $1.35 billion consumed over six months.

A stronger second half for crypto may depend on Strategy clarifying how it plans to meet its dividend payments and on the approval of the U.S. crypto market structure bill, for which JPMorgan analysts now see less than a 50% chance of passage this year. Despite the cautious tone, JPMorgan concluded that current weak sentiment could serve as a contrarian indicator for an upward turn.

Strategy still holds 843,706 $BTC, having raised $128.3 million through at-the-market common stock sales during the same period, with its BTC treasury worth north of $65 billion at current prices.

Sources:
JPMorgan says Strategy may need to rebuild dollar reserves to restore confidence, The Block
Strategy sold 32 bitcoin for $2.5 million in late May, CoinDesk
Analysts agree Strategy's bitcoin sale was immaterial, differ on future signals, CoinDesk