JPMorgan: The biggest risk to Bitcoin is not Strategy's sell-off, but blockchain adoption bypassing public chains and tokens

BlockBeats news, July 9 — Analysts at JPMorgan noted that the market views Strategy's Bitcoin sale plan as a key risk for the crypto market, but it is not the main structural threat to Bitcoin. A more fundamental risk lies in the fact that tokenization, payments, and settlements are increasingly occurring on permissioned infrastructure that bypasses public blockchains. If this trend continues, the entire crypto ecosystem could face a "structural downgrade," leading to slower trading activity, declining liquidity, and weaker capital inflows, ultimately dragging down Bitcoin. The analysts stated directly: In our view, the more important risk comes from the way blockchain is being adopted in traditional finance, which continues to circumvent public permissionless networks.

The analysts explained that institutional adoption to date has been distinctly tilted toward permissioned chains, as they offer advantages in privacy, KYC/AML controls, governance, throughput, legal accountability, and regulatory certainty, posing a competitive threat to public chains like Ethereum. If tokenized deposits are widely adopted—especially in non-transferable forms favored by regulators—they could weaken demand for stablecoins in institutional payments and settlements. Meanwhile, the SWIFT blockchain initiative and CBDC projects such as the digital euro and digital renminbi further reinforce regulated alternatives. In the roughly $50 billion real-world asset tokenization market, although Ethereum currently holds a certain share, this likely reflects early experimentation rather than long-term market structure—as institutional adoption grows, issuance, custody, settlement, and lifecycle management may increasingly be carried out on private or permissioned infrastructure that meets identity, confidentiality, and operational resilience requirements, with public chains used only for distribution and limited secondary trading.