TechFlow news, July 18, according to The Block, JPMorgan analysts stated that Strategy's recent increase in USD reserves, as well as fund inflows recorded in the Bitcoin futures market, are "encouraging signs" for Bitcoin's outlook, despite spot Bitcoin ETF fund flows remaining relatively volatile recently.
Analysts pointed out that spot Bitcoin ETFs recorded inflows last week, but turned to outflows this week. In contrast, leveraged ETFs linked to Strategy have maintained relatively stable positive inflows for 7 consecutive weeks. JPMorgan believes that this buying pressure mainly comes from retail investors, which may provide support for Strategy's stock price and prevent its common stock from falling below the net asset value of the Bitcoin held by the company.
Strategy recently increased its USD reserves from $2.55 billion to $3 billion, equivalent to about 20 months of preferred stock dividend expenditures. JPMorgan previously stated that if the company can reserve enough cash to pay preferred stock dividends for 2 to 3 years, it would help alleviate market concerns about its potential sale of Bitcoin to pay dividends in the future.
Analysts emphasized that it is currently difficult to determine whether Strategy's increase in cash reserves has directly improved Bitcoin investor sentiment. However, while spot Bitcoin ETFs saw fund outflows, CME Bitcoin futures and perpetual futures still recorded positive inflows this week, indicating improved demand in the futures market led by institutional investors.
Strategy President and CEO Phong Le previously stated that the company still plans to buy Bitcoin in the long term and hopes to continue being the largest Bitcoin buyer in the market in the foreseeable future. The company also plans to further issue STRC preferred stock after it rebounds to a par value of $100 per share, and the proceeds may be used to purchase Bitcoin and increase USD reserves.
