Although Strategy’s (MSTR) aggressive buying of bitcoin (BTC) has sent its shares soaring over 2,500% over the past five years, one analyst argues that the reverse could soon be the case.

“While we were negative on several respects upon initiation, we have gained incremental confidence that the convertible issuance strategy is likely tapped,” wrote Monness Crespi analyst Gus Gala, downgrading MSTR to sell just two weeks after initiating coverage at neutral.

Strategy currently holds 528,185 BTC on its balance sheet and has been buying sizable quantities nearly every week for the past few months, mostly funded by common share issuance and also sales of its initial preferred series STRK.

Gala’s price target of $220 suggests just shy of 30% downside from the current price in the $300 area.

Gala argued that it will become increasingly more difficult for MSTR to raise money to buy bitcoin via share issuance, forcing the company to shift towards fixed income vehicles.

“If fixed income securities do not become a greater portion of issuance, the BTC treasury strategy will look increasingly challenged.”

Gala noted that MSTR has already used $18.6 billion of its $21 billion common share at-the-market offering. The company also raised another $711 million last week via STRF, its second series of preferred stock.

The U.S.’ crypto-friendly stance could increase the level of risk in financial markets by deepening the connections between traditional finance (TradFi) and the digital asset economy, according to regulator the European Securities and Markets Authority.

«This crypto-friendly stance has the potential to accelerate crypto adoption, including by institutional investors,» a spokesperson for the European Union’s financial markets regulator said in an interview. «This would in turn increase interconnectedness and, failing relevant safeguards, risks of negative spillover effects between crypto and traditional markets.»

Since becoming president on Jan. 20, Donald Trump has ordered his administration to set up a bitcoin reserve and urged it to establish crypto friendly policies. The crypto market had already reacted positively to Trump’s election victory in November, and bitcoin (BTC) climbed to a record high around $109,000 on the day he was sworn in, CoinDesk data showed.

In a joint report published Monday, ESMA, the European Banking Authority and the European Insurance and Occupational Pensions Authority identified «volatile crypto-asset valuations, driven by expectations of U.S. deregulatory policy agenda; increasing interconnections to traditional financial markets,» as a key driver in financial markets.

Separately, Piero Cipollone, an executive board member of the European Central Bank urged for a digital euro, an ECB-backed digital version of the single currency, to substitute for crypto assets, which he described as being «highly volatile and speculative in nature.»

«Furthermore, the United States’ push to maintain the dollar’s global dominance through the promotion of stablecoins worldwide presents its own set of challenges,» he said.

The total market cap of the 14 U.S.-listed bitcoin (BTC) miners tracked by JPMorgan (JPM) dropped 25% in March, the third-worst monthly performance on record, the Wall Street bank said Tuesday.

Only one stock, Stronghold Digital Mining (SDIG), outperformed bitcoin (BTC) last month, the report noted. Bitfarms (BITF) completed its acquisition of the company on March 17. Miners with high performance computing (HPC) exposure underperformed pure-play miners for the second month in a row.

«We note valuations today are at the lowest levels relative to the block reward since the collapse of FTX in the Fall of 2023,» analysts Reginald Smith and Charles Pearce wrote.

The average network hashrate inched higher during the month to 816 exahashes per second (EH/s), the report said. The hashrate refers to the total combined computational power used to mine and process transactions on a proof-of-work blockchain, and is a proxy for competition in the industry and mining difficulty.

Mining revenue and profitability both fell.

«We estimate bitcoin miners earned an average of $47,300 per EH/s in daily block reward revenue in March, down 13% from February,» the bank said. Daily block reward gross profit dropped 22% month-on-month to $23,000 per EH/s.

Stronghold Digital outperformed the sector last month with a 2% decline. Cipher Mining (CIFR) underperformed with a 45% slump.

Read more: Bitcoin Network Hashrate Inched Higher in March as Mining Economics Weakened: JPMorgan

UPDATE (April 1, 14:25 UTC): Adds Bitfarms’ purchase of Stronghold Digital in second paragraph.