JPMorgan Reveals Major Risk in Bitcoin! Analyst Warns of a Decline!

While many reasons were cited for the decline in Bitcoin prices, one of the biggest factors was the sale and statements made by Strategy (MSTR), the largest institutional Bitcoin company.

At this point, while Strategy 32 is selling BTC, it has also formalized a policy allowing it to sell BTC as needed to meet future obligations such as preferred stock dividends.

In this context, while the risks surrounding Strategy’s BTC sale persist, an updated analysis has come from US banking giant JPMorgan.

According to Coindesk, JPMorgan analyzed that Strategy’s BTC selling policy created unnecessary two-way risk.

In a recent report, JPMorgan stated that Strategy’s Bitcoin liquidation program created unnecessary two-way risk for the cryptocurrency market, thereby increasing uncertainty and volatility.

Strategy stated that it currently has $2.55 billion in cash assets, which is sufficient to cover the company’s liabilities for approximately 17 months.

However, JPMorgan argues that maintaining sufficient cash reserves to last 24 to 36 months is necessary to boost investor confidence.

The bank argued that expanding dollar reserves by issuing common stock, even at a discount to net asset value (NAV), would yield better results than selling BTC.

JPMorgan added that Strategy currently holds about four percent of the total BTC supply, and that the ability of such an influential company to both buy and sell creates unnecessary risk for the market and could increase financing costs in the future.

Even if Strategy’s policy regarding Bitcoin sales is formalized, the fact that such a large company is selling BTC continues to put pressure on the price.

Bitcoin Could Experience a Major Drop!

This situation is also reflected in the options market, with Greeks.live analyst Adam saying that although Bitcoin has recovered to the $60,000 level, it faces the risk of a larger decline.

In an analysis published on Analyst X, it was stated that the gamma position (GEX) in the options market is currently concentrated around $60,000. According to the analyst, both call and put option positions have accumulated at this level due to the price repeatedly moving within this range.

At this point, the analyst noted that put options were concentrated in the $55,000 to $60,000 range, with a gap in positions below $55,000.

This suggests that a break below the $55,000 support level could significantly accelerate the decline.

“Overall, the risk of downside is greater than the upside potential,” he said, adding that macroeconomic uncertainty and outflows from US ETFs were affecting the market.

*This is not investment advice.

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