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JPMorgan: Strategy Bitcoin sales policy introduces 'avoidable risk' to the market

MeNews
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ME News reports that on July 3 (UTC+8), JPMorgan analysts said that Michael Saylor's Strategy recently officially launched a Bitcoin selling policy, transforming the company from a pure BTC buyer into a potential seller, introducing "avoidable two-way risk" to the crypto market. Strategy's Bitcoin selling policy is called the BTC Monetization Program, which allows the company to sell Bitcoin to raise up to $1.25 billion in cash reserves for paying preferred stock dividends and interest expenses, or for preferred stock buybacks and common stock buybacks, in order to optimize the capital structure. JPMorgan believes that if Strategy could potentially sell BTC in the future, it would increase market uncertainty and volatility regarding Bitcoin's price. Analysts say that this risk could have been avoided if the company had instead chosen to issue equity to supplement future dividend payment reserves. Strategy's current minimum cash reserve target is to cover 12 months of preferred stock dividend and interest payments, and its current $2.55 billion cash reserve can cover approximately 17 months of dividends. JPMorgan believes that the company should increase its cash reserve to cover 24 to 36 months of related obligations, even if this could result in the common stock trading at a discount to net asset value, which would also reassure investors that the company will not be forced to sell Bitcoin in the short term. (Source: ODAILY)
BTC1.18%
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