JPMorgan has raised concerns about MicroStrategy's Bitcoin strategy, suggesting it could increase market volatility. The Wall Street bank noted that MicroStrategy's approach of selectively selling Bitcoin to fund preferred stock dividends introduces a "two-way buying and selling" liquidity risk, adding to the uncertainty in the crypto market.
MicroStrategy, which holds approximately 847,000 BTC, accounting for about 4% of the total Bitcoin supply, has made cumulative purchases this year totaling $13.7 billion. This represents around 70% of net market inflows. JPMorgan analysts recommend that MicroStrategy raise common equity to extend its cash reserves coverage from 17 months to 24–36 months, reducing the risk of forced Bitcoin sales. The company's dual role as a major buyer and potential seller could amplify Bitcoin's volatility and increase its future financing costs.
JPMorgan Warns MicroStrategy's BTC Strategy May Heighten Market Volatility
Disclaimer: The content provided on Phemex News is for informational purposes only. We do not guarantee the quality, accuracy, or completeness of the information sourced from third-party articles. The content on this page does not constitute financial or investment advice. We strongly encourage you to conduct you own research and consult with a qualified financial advisor before making any investment decisions.
