MicroStrategy just scooped up even more bitcoin as the cryptocurrency’s price pulled back from a new all-time high – a key strategy for the firm and one that has helped prop up the price of bitcoin. However, JPMorgan’s Marko Kolanovic warned that those leveraged purchases could also make any big downdrafts in bitcoin worse, saying that investors in the cryptocurrency should tread carefully. “MicroStrategy’s recent announcement that it acquired more than $800 million of bitcoin between Feb. 26 and March 10 alone funded via the sale of convertible notes, shows that the company, by appearing to transform itself to a leveraged play on bitcoin, has also played a part in amplifying the rally,” Kolanovic, the bank’s chief market strategist and co-head of global research, said in a note Monday. “In our mind, these debt-funded bitcoin purchases add froth to the current crypto rally by raising the risk of severe deleveraging in a potential downturn in the future,” he added. MicroStrategy also purchased 12,000 bitcoins for close to $822 million last week, and 9,245 bitcoins for about $623 million this week, both times using proceeds from the sale of convertible notes. MicroStrategy raised $604 million from the sale of converts on March 18, and another $800 million on March 8 . The latest purchases mark an acceleration from the fourth quarter pace, when MicroStrategy bought more than $1 billion of bitcoin. The company now holds a total of 214,246 bitcoins, it announced Tuesday. Originally launched as an enterprise business software company, Microstrategy has been buying bitcoin and holding them on its balance sheet since 2020. It largely trades as a proxy for the price of bitcoin, and in February of this year leaned into that, rebranding itself a Bitcoin development company. Momentum traders have been heavily buying both gold and bitcoin futures since February, Kolanovic noted. Now, “if a crypto market downturn materializes over the coming months, gold would likely be negatively affected,” the strategist said. Although the bitcoin rally was catalyzed by crypto-specific factors late last year, including anticipation over the debut of spot bitcoin exchange-traded funds and the upcoming Bitcoin halving event in April, research shows it may have also recently fused into the gold rally – fueled by positive sentiment toward risk assets and greater liquidity in cryptocurrencies. “To the extent momentum traders … have been behind this futures impulse, the risk of mean reversion looks high at the moment for both gold and bitcoin given the extremity of the momentum signals,” Kolanovic wrote. MicroStrategy shares are up 122% this year compared to bitcoin’s 52% run. Both began turning lower last week as investors began taking profits after bitcoin reached record highs. —CNBC’s Michael Bloom contributed reporting.