JPMorgan: $1.7B dividend could spur MicroStrategy bitcoin sales

JPMorgan warned that MicroStrategy Inc. (Nasdaq: MSTR) faces a roughly $1.7 billion annual preferred dividend obligation that could prompt more bitcoin sales after the company sold 32 BTC late last month to fund preferred dividends.

Between May 26 and May 31, MicroStrategy sold 32 bitcoin for about $2.5 million at an average price near $77,135, according to company disclosures. The bank described the sale as small and voluntary and noted the 32 BTC represented roughly 0.0038% of the firm’s holdings.

As of May 31, MicroStrategy held 843,706 bitcoin, acquired for about $63.87 billion at an average cost of $75,699 per coin. Executive Chairman Michael Saylor has long advocated a “never sell” approach to the company’s bitcoin holdings; on the first-quarter earnings call he told investors the firm would “probably sell some bitcoin to pay a dividend just to inoculate the market and send the message that we did it.”

JPMorgan said the immediate issue for investors is how MicroStrategy funds upcoming dividend rounds. The bank noted that reliance on dollar reserves or fresh capital raises would reduce pressure to sell bitcoin, while any return to the market with additional disposals would draw renewed scrutiny of the company’s model as the largest public corporate holder of bitcoin.

The bank also lowered its outlook on U.S. crypto policy, estimating under a 50% chance that the Digital Asset Market Clarity (CLARITY) Act becomes law this year. JPMorgan cited a narrowing congressional calendar ahead of the midterm elections and an unresolved debate over whether stablecoins can pay yield.

Despite the late-May sale, JPMorgan does not expect MicroStrategy to abandon its bitcoin strategy and projects the firm’s bitcoin purchases could reach about $32 billion in 2026. The bank said replenishing dollar reserves would help allay concerns that dividend payments will force recurring asset sales.

Following the disclosed sale, MicroStrategy’s shares fell roughly 7% as investors weighed the implications. The company began accumulating bitcoin years ago as a corporate treasury strategy and remains the largest public corporate holder. How it covers preferred dividend obligations — through reserves, capital raises, or periodic bitcoin sales — will be a focus for market participants in the second half of the year.