JPMorgan's latest report identifies Strategy's capital allocation as a risk factor that Bitcoin investors should monitor. The bank believes that if the company, which has been consistently increasing its Bitcoin holdings, does not replenish its U.S. dollar reserves, market concerns about whether it may need to sell Bitcoin to fund dividends could continue to rise.
Dollar reserves are sufficient for only about 6.3 months.
The report states that Strategy sold 32 bitcoins between May 26 and May 31. JPMorgan noted that this transaction was small in scale, more of a symbolic gesture aimed at demonstrating to preferred shareholders the company's operational flexibility.
However, this has prompted outsiders to reassess how the company will pay dividends and debt costs in the future without touching its Bitcoin holdings. JPMorgan estimates that Strategy’s remaining U.S. dollar reserves are sufficient to cover only about 6.3 months of dividend payments.
The company previously established a reserve of approximately $1.44 billion in December last year to support preferred dividend payments and cover interest on outstanding debt. With the annual dividend obligation rising to approximately $1.7 billion, replenishing the reserve is seen as a direct way to alleviate market concerns.
JPMorgan still favors continuing to buy crypto
Shortly after these concerns arose, Michael Saylor, co-founder and executive chairman of Strategy, posted on X that it’s a good time to “add a few more points,” suggesting the company may continue increasing its Bitcoin holdings.
Despite becoming more cautious about reserve conditions, J.P. Morgan has not lowered its buy-side expectations for Strategy. The bank estimates that, based on the current acquisition pace this year, Strategy’s Bitcoin purchases could reach approximately $32 billion in 2026, higher than the approximately $22 billion expected for both 2024 and 2025.
As of now, Strategy holds 843,706 bitcoins with an average purchase cost of approximately $75,699 per bitcoin. J.P. Morgan estimates that, at current market prices, this position represents an unrealized loss of approximately $11.5 billion.
Legislation and cash flow expectations have been lowered.
In addition to company-level concerns, JPMorgan has lowered its assessment of the progress of U.S. cryptocurrency policy. The bank now believes the probability of the U.S. cryptocurrency market structure bill, the CLARITY Act, passing this year is below 50%.
On the funding side, J.P. Morgan estimates that approximately $22 billion has flowed into the digital asset market this year, annualized to about $52 billion—nearly half of the level seen in 2025. This figure includes funding flows from crypto funds, CME futures positions, venture capital raises, and corporate treasury cryptocurrency purchases.
The report also noted that the cost of Bitcoin production remains an important indicator for observing its price. The estimated median production cost of Bitcoin was around $90,000 at the beginning of the year, declined to $77,000, and has recently rebounded to approximately $87,000.