According to a report led by Nikolaos Panigirtzoglou, Managing Director at JPMorgan, Strategy selling 3,588 BTC and raising $216 million is a short-term issue, but Bitcoin faces deeper, long-term structural risks: if tokenization, payments, and settlement activity ultimately end up on permissioned private blockchains rather than public networks, the crypto ecosystem will suffer a structural devaluation, and this drag will eventually weigh on Bitcoin.
JPMorgan: If tokenized activity lands on permissioned chains, the public chain ecosystem will face structural devaluation
According to a JPMorgan report, its core concern is not Strategy’s short-term selling pressure, but the long-term direction of tokenization, payments, and settlement. If these activities ultimately move to permissioned chains rather than public chains, the crypto ecosystem could face the following structural impacts:
Liquidity worsens: capital does not flow into native tokens on public chains
Capital flows weaken: institutional capital bypasses public chains and goes to private infrastructure
On-chain transaction volume slows: activity shifts to opaque permissioned environments
Drags on Bitcoin: reduced overall crypto ecosystem vitality ultimately affects Bitcoin’s market positioning
The reasons institutions favor permissioned blockchains include: privacy protection, KYC/AML compliance controls, governance mechanisms, higher throughput, legal liability frameworks, and regulatory certainty.
BIS proposal for a “single ledger,” with SWIFT and CBDC measures strengthening regulated channels
As cited in the JPMorgan report, the Bank for International Settlements (BIS) previously warned against using unpermissioned public blockchains as systemically important financial infrastructure, and advocated building a “single ledger” to keep tokenized central bank money, bank deposits, and assets within a regulated perimeter.
Tokenized deposits (digitalized claims on bank balances, subject to bank supervision and deposit insurance protection) are the most typical example; if non-transferable forms favored by regulators become widespread, they could displace stablecoins’ market share in institutional payments.
SWIFT’s blockchain projects and CBDC initiatives (such as the digital euro and the digital yuan) will further strengthen this regulated channel.
RWA tokenization market size approaches $50 billion
According to the JPMorgan report, the real-world assets (RWA) tokenization market is currently close to $50 billion, with most based on Ethereum; however, analysts believe this is only an early-stage experiment rather than a mature architecture. As technology matures, issuance, custody, and settlement may migrate to private infrastructure, while public chains focus on distribution and interoperability.
The DTCC and Securitize cases are cited as evidence for this trend; analysts also question whether, given the capital savings from deferred net settlement, a public settlement model is still the most effective option for regulated entities.
JPMorgan proposes three scenarios that could invalidate the “stablecoin-friendly regulation” and related arguments
According to the JPMorgan report, analysts propose three possible scenarios that could make the above arguments fail: first, a hybrid model where both types of chains matter becomes mainstream; second, under friendly regulatory rules (such as the Clarity Act), stablecoin adoption is higher; and third, Bitcoin continues to play the role of “digital gold,” providing a devaluation hedge regardless of what happens in other crypto sectors.
It is worth noting that JPMorgan analysts point out that even if the Clarity Act passes this year, it could still come at the expense of public stablecoins, while promoting the development of deposit tokens issued by banks.
Frequently asked questions
What is JPMorgan’s biggest long-term structural threat to Bitcoin?
According to a report led by Nikolaos Panigirtzoglou at JPMorgan, the biggest long-term structural threat is institutional and bank adoption of permissioned private blockchains rather than public networks. If tokenization, payments, and settlement activity fall on permissioned chains, the crypto ecosystem will face structural devaluation such as worsening liquidity and weaker capital flows, ultimately dragging on Bitcoin.
How much impact does Strategy’s BTC selling have on Bitcoin?
According to a JPMorgan report, Strategy sold 3,588 BTC at the beginning of July (a $216 million transaction, the company’s largest single sale ever), which is a short-term issue. It may trigger short-term selling pressure, but it is not the main structural threat Bitcoin faces.
What circumstances could make JPMorgan’s “private-chain threat” thesis fail?
According to the JPMorgan report, three scenarios could undermine its thesis: a hybrid model where public and private chains are both important becomes mainstream; friendly regulation (such as the Clarity Act passing) drives widespread stablecoin adoption; and Bitcoin continues to provide a hedging function as “digital gold,” unaffected by other crypto industry segments.
