JPMorgan: Private Blockchains Pose Greater Risk to Bitcoin Than Strategy’s BTC Sales

TLDR

• JPMorgan analysts say Strategy’s bitcoin sales are not the main structural risk to bitcoin
• The bigger threat is blockchain adoption that bypasses public networks like Bitcoin and Ethereum
• Banks prefer private, permissioned blockchains for identity checks, privacy, and regulatory compliance
• Tokenized bank deposits could reduce demand for public blockchain-based stablecoins
• The $50 billion real-world asset tokenization market may shift further toward private infrastructure

Strategy’s bitcoin sales have rattled some investors, but JPMorgan analysts say that is not what bitcoin holders should be worried about.

In a note to clients, analysts led by managing director Nikolaos Panigirtzoglou said the real risk comes from traditional finance building blockchain systems that do not use public networks like Bitcoin or Ethereum.

If tokenization, payments, and settlement move to private, permissioned infrastructure, public blockchains could see slower activity, lower liquidity, and weaker capital flows.

Strategy holds around 4% of all bitcoin in circulation. Its formal Bitcoin Monetization Program has introduced some two-way flow into the market. JPMorgan acknowledged this could create periodic selling pressure, but called it a secondary issue.

Why Banks Are Choosing Private Blockchains

Institutions are gravitating toward permissioned blockchains because they offer privacy controls, know-your-customer compliance, legal accountability, and regulatory certainty — features that public blockchains do not easily provide.

JPMorgan pointed to its own platform, Kinexys, as an example. The permissioned system has processed over $4 trillion in cumulative transaction volume for institutional clients.

The Bank for International Settlements has also warned against using public blockchains for systemically important financial infrastructure. The BIS has pushed for permissioned unified ledgers instead.

Banks are developing tokenized deposits — digital versions of bank deposits that sit within existing banking regulation and deposit insurance frameworks. If widely adopted, these could reduce the need for stablecoins in institutional payments.

SWIFT’s blockchain initiative and central bank digital currency projects like the digital euro and digital yuan could further strengthen the regulated alternatives.

Real-World Asset Tokenization at a Crossroads

The tokenized real-world asset market is currently worth around $50 billion. A meaningful share is hosted on Ethereum, but JPMorgan said this likely reflects early experimentation.

As institutional use grows, issuance, custody, and settlement could increasingly move to private infrastructure that better meets identity, confidentiality, and governance requirements.

Public blockchains may still be used for distribution and limited secondary trading, but could become less central over time.

The analysts also noted that the DTCC is developing tokenization workflows on permissioned infrastructure, while Securitize has issued tokenized assets on Solana and Avalanche through a regulated platform.

Even if the CLARITY Act passes later this year, JPMorgan said it may not solve these structural risks. The legislation could actually help banks issue tokenized deposits faster, further strengthening their position.

The analysts said their 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 store of value.

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