Strategy's Dollar Reserves Expanded to $3 Billion... JPMorgan Positive on Bitcoin

JPMorgan evaluated the expansion of Strategy's dollar reserves to $3 billion as a positive signal for Bitcoin. The fund increased its dollar reserves by $450 million from $2.55 billion to $3 billion last week without trading Bitcoin during the period. Nicolaos Panigirtzoglou's JPMorgan analysis team noted that the $3 billion reserve covers approximately 20 months of preferred dividend payments. If Strategy can build reserves sufficient to cover 2-3 years of dividends, it could reduce concerns about selling Bitcoin to fund dividends. While JPMorgan found it difficult to assess the immediate impact on investor sentiment, it highlighted continued inflows into Bitcoin futures markets despite outflows from Bitcoin spot ETFs. The Chicago Mercantile Exchange reported inflows into both Bitcoin futures and perpetual markets, which JPMorgan attributed to higher institutional investor participation. In contrast, Bitcoin spot ETF flows remained volatile, with inflows last week but outflows this week. However, Strategy-linked leveraged ETFs saw seven consecutive weeks of inflows, which JPMorgan attributed to retail investor demand and support for Strategy's stock price. Fung Le, CEO of Strategy, stated that reviewing debt risk is unnecessary as long as Bitcoin remains above $8,000-$10,000, aiming to create a capital structure that can withstand downturns and benefit from uptrends. He also mentioned that the $3 billion reserve expansion supports STRC price recovery and plans to continue expanding reserves, with potential additional Bitcoin purchases or reserve additions if STRC recovers to its $100 par value.