Bitcoin’s recent price slump has been tied to several factors, but one stands out: the selling activity and public statements from Strategy (MSTR), the largest institutional holder of Bitcoin. Strategy has been selling BTC and has formalized a policy allowing further sales to meet obligations like preferred stock dividends. This has drawn attention from JPMorgan, which released an updated analysis on the situation.
JPMorgan Flags Risks in Strategy’s Bitcoin Policy
JPMorgan’s analysts, in a report covered by Coindesk, argued that Strategy’s BTC selling policy creates “unnecessary two-way risk” for the cryptocurrency market. They believe this increases uncertainty and volatility, even as Strategy claims to have $2.55 billion in cash assets—enough to cover liabilities for about 17 months. The bank disagrees, suggesting that maintaining cash reserves for 24 to 36 months would better boost investor confidence.
The report suggests that expanding dollar reserves by issuing common stock, even at a discount to net asset value (NAV), would be preferable to selling BTC. JPMorgan also noted that Strategy now holds about 4% of the total Bitcoin supply. The ability of such a major player to both buy and sell creates, in their view, unnecessary risk for the market and could increase financing costs down the line.
Market Pressure and Analyst Warnings
Even with a formalized sales policy, the fact that such a large company is actively selling BTC continues to weigh on prices. This pressure is visible in the options market, too. Adam from Greeks.live, an analyst, pointed out that while Bitcoin has recovered to around $60,000, it still faces the risk of a larger drop.
In analysis shared on X (formerly Twitter), it was noted that the gamma position (GEX) in options is concentrated around $60,000. Both call and put options have accumulated here due to repeated price movements within this range. Put options are clustered between $55,000 and $60,000, with a notable gap below $55,000. This suggests that if Bitcoin breaks below $55,000 support, the decline could accelerate sharply.
“Overall, the risk of downside is greater than the upside potential,” the analyst said, adding that macroeconomic uncertainty and outflows from US ETFs are also affecting the market.
*This is not investment advice.*
