JPMorgan Issued a Warning About Bitcoin and Cryptocurrencies: “In the Near Term…”

JPMorgan analysts have warned that Bitcoin and the overall cryptocurrency market could remain under pressure in the near term.

Despite an initial surge earlier this week, driven by President Donald Trump’s much-discussed social media update on Bitcoin holdings as a “strategic crypto reserve,” gains quickly reversed amid broader concerns about tariffs in the market.

Skepticism has emerged following further analysis of the strategic crypto reserve, JPMorgan’s Nikolaos Panigirtzoglou said in a note. “There is skepticism not only about congressional approval for such a strategic crypto reserve, but also about the feasibility of including smaller tokens other than Bitcoin and Ethereum, given their higher risk and volatility,” he said.

Panigirtzoglou also noted that Bitcoin reserves have failed to gain traction at the state level. Proposals for adoption have been rejected in Montana, North Dakota, South Dakota, and Wyoming due to concerns about risk and volatility. Additionally, central banks in Switzerland and Poland have rejected the idea of including Bitcoin reserves, further dampening institutional sentiment.

Another factor influencing Bitcoin’s price is the lack of a significant crypto-specific catalyst. “Institutional investors also appear to have reduced their positions due to the lack of positive catalysts and the deterioration of momentum,” Panigirtzoglou said. He added that JPMorgan’s futures indicators for Bitcoin and Ethereum, based on changes in open interest in CME futures contracts, show that there is room for further easing, especially as momentum traders start to create short positions.

Signs of weakening demand are reflected in recent capital raises by major players in the sector. Strategy, formerly known as MicroStrategy, issued $2 billion in convertible debt, while bitcoin miners such as Mara Holdings have also raised significant capital through equity and debt offerings. However, Panigirtzoglou noted that the terms of these deals have become increasingly investor-friendly over the past month, indicating increased caution and selectivity among investors.

*This is not investment advice.