JPMorgan Analysts Warn of Structural Downgrade Risks for Public Chains

JPMorgan's analyst team pointed out that the Strategy Bitcoin selling plan is viewed by the market as a crypto risk, but the more fundamental threat comes from the shift towards permissioned infrastructure for tokenization, payments, and settlements that do not require public chains.

Institutions show a clear preference for permissioned chains due to their advantages in privacy, KYC/AML, governance, throughput, and regulatory certainty, posing direct competition to public chains like Ethereum. In the approximately $50 billion tokenization market for real-world assets, Ethereum's current share reflects more of an early experimental phase.

If tokenized deposits are widely adopted and exist in a non-transferable form, it will weaken the demand for stablecoin institutions; the SWIFT blockchain initiative and CBDC projects like the digital euro and digital yuan further reinforce regulated alternatives, leading to a decline in public chain transaction activity, liquidity, and capital inflows.

Source: Public Information