The cryptocurrency markets are expected to remain under short-term pressure due to a lack of positive catalysts and skepticism as to whether the congress will approve a reserve of American strategic cryptography, JPMorgan (JPM) said in a research report on Wednesday.
“Not only is skepticism about the approval of the congress for such a strategic cryptography reserve, but also the feasibility of including smaller tokens outside of Bitcoin (BTC) and ether (ETH) given their risk and volatility,” wrote Nikolaos Panigirtzoglou analysts.
Thursday, President Donald Trump ordered his administration to establish a Bitcoin strategic reserve to hold the assets that have been seized by the government. He also called for a stock of other cryptographic assets, without naming those which should be included despite the mention of XRP, Solana (Sol) and Cardano (ADA) earlier in the week.
JPMorgan noted that discussions on the inclusion of bitcoin in strategic reserves at the level of the state did not obtain support either.
States such as Montana, Northern Dakota, South Dakota and Wyoming have all rejected such proposals due to concerns of “risk and volatility”, according to the report.
World central banks are also warning against the largest cryptocurrency in the world in their reserves.
The Swiss National Bank (SNB) and the National Bank of Poland have rejected the addition of bitcoin to their reserves, opting rather for more stable assets such as gold, noted JPMorgan.
Singapore also rejected the idea. “Cryptocurrencies do not align with [the bank’s] Long-term investment strategies because of their speculative nature, “he said.
The European Central Bank (ECB) has criticized the idea of bitcoin as a reserve ratio, and this indicates wider skepticism among political decision -makers on the use of cryptos as reserve assets, added the report.
Read more: Trump’s strategic reserve for cryptography is a positive market, the market was wrong, says Bitwise said
