JPMorgan says Strategy's BTC sale created market anxiety, advises boosting reserves

Strategy's (MSTR) recent sale of Bitcoin has contracted the market, and the company may need to increase its U.S. dollar reserves to restore investor confidence and ease concerns, JPMorgan said in a recent analysis reported by The Block. The bank noted that while Strategy described its sale of 32 BTC as a move to show flexibility to preferred shareholders, it created market anxiety. JPMorgan recommended that Strategy increase its dollar reserves, which currently cover only about six months of dividend payments. The analysis added that a market rebound in the second half of the year depends on Strategy clarifying its dividend plans and the passage of the CLARITY Act, though it gives the bill a less than 50% chance of passing this year. Other negative signals cited include this year's crypto market inflows of around $22 billion—half of last year's total—and BTC remaining below its mining cost of $87,000. However, the bank concluded that the current weak sentiment could also be a contrarian signal for an upward turn.