JPMorgan warns private blockchains a bigger Bitcoin threat than Strategy's 4%

Wall Street's push into permissioned blockchain networks poses a greater long-term threat to Bitcoin than any selling from Michael Saylor's Strategy, JPMorgan analysts said.

Strategy's 4% Bitcoin hoard is not the main structural threat to the asset — the banking industry's migration to private blockchains is, JPMorgan analysts said.

"Strategy is not our primary thinking as a structural threat to Bitcoin," Nikolaos Panigirtzoglou, managing director at JPMorgan, said in a note to clients. The bigger danger comes from traditional finance adopting blockchain technology outside public permissionless networks like Bitcoin and Ethereum, he said.

JPMorgan's own Kinexys platform, a permissioned blockchain for institutional clients, has processed more than $4 trillion in cumulative transaction volume. The Canton Network, another permissioned system, generated about $60 million in fees over the 30 days through late June, compared with $11 million for Ethereum, according to DeFiLlama data. More than 15 major banks are building a shared tokenized deposit network through The Clearing House, targeting a 2027 launch, per PYMNTS.

The shift matters because the tokenized real-world asset market, valued at roughly $50 billion, could migrate to permissioned rails as it matures. Public chains currently host about $31 billion of that total, with roughly two-thirds on Ethereum, according to rwa.xyz. If settlement activity moves to private infrastructure, the broader crypto ecosystem could face thinner liquidity and weaker capital flows — a drag that would reach Bitcoin over time.

Banks Build Permissioned Rails at Scale

Tokenized deposits represent the clearest challenge to public blockchain stablecoins, the analysts said. These digital claims on bank balances, backed by deposit insurance and banking regulation, could crowd out stablecoins in institutional payments if they gain adoption. SWIFT's blockchain project and central bank digital currency efforts such as the digital euro and digital yuan would reinforce that regulated lane.

JPMorgan cited the Bank for International Settlements, which has warned against public permissionless chains for systemic financial infrastructure and has pushed instead for unified ledgers that hold tokenized central bank money, bank deposits and assets inside regulated walls.

Strategy Sales a Secondary Concern

Strategy sold 3,588 Bitcoin for $216 million in early July to cover preferred dividends, its largest disposal on record. Such sales can add bursts of selling pressure, but the analysts framed them as a secondary concern rather than a structural threat.

The CLARITY Act, even if passed this year, may not address the broader issue. Regulatory clarity could help banks issue tokenized deposits faster, potentially accelerating the shift away from public networks, the analysts said.

JPMorgan said its outlook could change if public and private chains develop side by side, stablecoins grow under clearer rules, or Bitcoin continues to trade mainly as a debasement hedge — a narrative that has underpinned its institutional appeal.

This article is for informational purposes only and does not constitute investment advice.