JPMorgan: **Strategy** Cash Reserves Increase Sends Positive Signal, Bitcoin Futures Demand Improves in Sync

BlockBeats News, July 17th, Morgan Stanley analyst pointed out in a recent report that Strategy has recently increased its dollar reserves from $25.5 billion to $30 billion, enough to cover approximately 20 months of preferred stock dividends. This is seen as an encouraging sign for the future of Bitcoin. If Strategy can rebuild its dollar reserves to cover dividends for two to three years, it will alleviate market concerns about the potential need to sell Bitcoin to pay preferred stock dividends. Meanwhile, despite the recent volatile flows in spot Bitcoin ETF funds, both Chicago Mercantile Exchange Bitcoin futures and perpetual contracts have seen net inflows this week, typically driven by institutional investors rather than retail, contrasting with the outflows from spot ETFs.

In addition, leveraged ETFs linked to Strategy have seen relatively stable and positive fund flows over the past seven weeks, mainly driven by retail buying. This provides support for Strategy's common stock price, preventing it from falling below the net asset value of its Bitcoin holdings. Strategy's President and CEO Phong Le stated earlier this week that the company's balance sheet is very secure, expressing concerns about debt-related risks only if Bitcoin were to drop to the range of $8,000 to $10,000. The company plans to issue more after the STRC preferred stock returns to a face value of $100 to further increase its Bitcoin holdings and expand its dollar reserves.

Morgan Stanley also reiterated that Strategy is not the primary structural threat to Bitcoin—the greater risk lies in the widespread adoption of blockchain technology through permissioned systems, which does not bode well for public blockchains and their native tokens.