JPMorgan analyst sees a greater danger for bitcoin than the recent sales of bitcoins by Strategy and its formal program to monetize them. They believe blockchain adoption will bypass public networks, tokens and other services that rely on these.
The report was led by the managing director Nikolaos Pantigirtzoglou. reported By: The Block The bank claimed that Strategy was not the biggest structural threat for the asset.
The company sold 3,588 bitcoin for $216 million In early July, the company sold its most shares ever to pay preferred dividends. This sale was one of the largest in history. Sales like this can create sudden bursts that increase pressure on sales. Analysts said that the deeper issue is You can find out more about this by clicking here. tokenizationThe final payment and settlement.
Should that activity settle on permissioned rails rather than public chains, the crypto ecosystem could face a structural de-rating — thinner liquidity, weaker capital flows and slower on-chain volume — a drag that would reach bitcoin in time.
Institutions have leaned toward permissioned blockchains, which offer privacy, know-your-customer and anti-money-laundering controls, governance, throughput, legal accountability and regulatory certainty.
JPMorgan says that JPMorgan’s preference for private networks creates problems of competitiveness.
Analysts cited Bank for International Settlements which warned against permissionless public chains for financial system infrastructure, and pushed for instead. “unified ledgers” This walled enclosure is regulated and contains tokenized bank deposits, central bank currency, and other assets.
Tokenization: a practical use-case
To meet that specification, banks have begun to build. Tokenized deposits — digital claims on bank balances, backed by banking regulation and deposit insurance — stand out as the clearest case. If such deposits were to spread as the regulators prefer, stablecoins could be displaced in institution payments.
SWIFT’s Blockchain Project and central bank efforts to digital currency such as the Digital Euro and Digital Yuan would strengthen this regulated lane.
The story of real-world tokenization is similar. Market capitalization is nearing $50 billion. Most of that money has been spent on Ethereum, but analysts see this as an early experiment rather than a finalized structure.
As the adoption of blockchains matures, it is possible that issuance, custody, and settlement will migrate to a private infrastructure. Public chains would be left for interoperability and distribution. DTCC Securitize are examples of the trend in action. The analysts questioned if the public settlement model is the best for regulated firms given capital savings from deferred and netted settlement.
How could JPMorgan be wrong?
The Clarity ActEven if it passes this year, it might not remove the threat. It could encourage bank issued deposit tokens to the detriment of stablecoins.
Three ways were identified by the analysts to break their thesis: a hybrid-model where both chains types are relevant, greater adoption of stablecoins with friendly regulations, or bitcoin retaining its role. “digital gold” And a debasement hedge, whatever happens to the rest of cryptocurrency.
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Source: bitcoinmagazine.com
