Michael Saylor · JPMorgan · Strategy · The Block
JPMorgan confirms Strategy may need to rebuild dollar reserves to restore confidence
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Michael Saylor's Strategy (formerly MicroStrategy) may need to rebuild its dollar reserves to restore investor confidence and reduce concerns about future bitcoin sales, according to JPMorgan analysts, who have now turned "cautious" on digital assets.
Key facts
- 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
- 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
- They estimate 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
- In December, Strategy established a $1.44 billion U.S. dollar reserve to safeguard dividend payments on its preferred stock and service interest on outstanding debt
Summary
Strategy's recent decision to sell 32 bitcoin "spooked" markets even if the sale was "symbolic and voluntary," intended to demonstrate the company's commitment and flexibility to preferred stockholders, JPMorgan analysts led by managing director Nikolaos Panigirtzoglou said in a report titled Alternative Investments Outlook and Strategy published Friday. The analysts said Strategy's current dollar reserves cover only about 6.3 months of dividend payments, adding to investor concerns. "In our opinion a rebuilding of the company's dollar reserves might be needed to restore confidence and reduce investor concerns that the company would sell more bitcoins to cover dividend payments," the analysts said. In December, Strategy established a $1.44 billion U.S. dollar reserve to safeguard dividend payments on its preferred stock and service interest on outstanding debt.