Strategy Is Allowing Selective Bitcoin Sales To Fund Dividends. JPMorgan Says It Could Add Two-Way Market Pressure.

JPMorgan analysts led by Nikolaos Panigirtzoglou said a higher reserve buffer, closer to 24 to 36 months of coverage, would provide greater comfort that Strategy would not need to sell bitcoin in the near term. (Credit: Reuters)

JPMorgan said Strategy's decision to allow selective bitcoin sales to fund preferred stock dividends has introduced what it is describing as "two-way risk" into crypto markets, a shift tied to the company's evolving capital structure and its large bitcoin holdings.

Strategy has formalized a policy that permits limited bitcoin sales when needed to meet dividend obligations, alongside authorizing share buybacks and preferred stock repurchases as part of its broader capital strategy. The company has also set a minimum cash reserve target equal to 12 months of preferred dividends and interest expenses, with current reserves reported at about $2.55 billion, covering roughly 17 months of obligations, Coindesk reported.