JPMorgan, which oversees roughly $5 trillion in client assets, says that cryptocurrencies are entering a new phase as institutional liquidity reshapes the market.
In a recent research note, the bank argued that crypto is evolving into a tradable macro asset, moving beyond its roots in retail speculation and early-stage venture dynamics.
Institutional Liquidity Redefines Price Behavior
According to JPMorgan, the crypto market has shifted from its early model, where large private funding rounds set valuations long before public trading. Retail investors often entered late and absorbed most of the risk. Today, analysts observe a decline in retail activity alongside growing institutional participation.
“This shift is stabilizing flows, lowering volatility, and creating more reliable long-term pricing,” the report said.
However, the bank also cautioned that market inefficiencies persist: liquidity remains uneven, contributing to sharp price swings. Macroeconomic conditions now play a greater role in crypto prices than Bitcoin’s traditional halving cycle, analysts added.
Consequently, JPMorgan estimates that Bitcoin could eventually reach $240,000, framing the asset as a multi-year growth play.
JPMorgan Warns of MicroStrategy Delisting Risk
The research note surfaced shortly after JPMorgan warned that MicroStrategy (now Strategy) could be removed from major equity indices. The warning specifically mentioned the MSCI USA Index, citing the company’s vast Bitcoin holdings.
In particular, Strategy owns 649,870 BTC, worth $56.91 billion, making its balance sheet heavily dependent on a single asset. Its stock has fallen 40% in the past month, bringing its valuation close to the value of its Bitcoin holdings.
JPMorgan noted that the company’s narrow balance-sheet structure limits its ability to raise capital. Additionally, the bank highlighted a potential MSCI rule change that could exclude firms with more than half their assets in digital currencies.
JPMorgan Expands Its Own Bitcoin ETF Position
Despite its caution regarding MicroStrategy, JPMorgan has been expanding its own crypto exposure.
For instance, in a recent 13F filing, the bank disclosed holdings of 5,284,190 shares of BlackRock’s Bitcoin ETF, IBIT, worth $343 million as of September 30, representing a 64% increase from June.
The filing also revealed $68 million in call options and $133 million in put options linked to the ETF. These positions are spread across multiple business units, including those that serve high-net-worth clients.
Bitcoin Seen as Undervalued After October Sell-Off
JPMorgan analysts stated that Bitcoin currently trades at a discount relative to gold, following a 30% price drop in October from its recent all-time high of $126 000. This decline came after heavy futures liquidations and concerns stemming from a $128 million Balancer hack.
Analyst Nikolaos Panigirtzoglou noted that leverage in perpetual futures has since normalized. The bank added that gold’s surge above $4,000 per ounce brought higher volatility, while Bitcoin’s volatility eased.
On a risk-adjusted basis, JPMorgan estimates Bitcoin would need to reach roughly $170,000 to match gold’s private-sector investment value, suggesting meaningful upside over the next six to twelve months if current conditions persist.
Meanwhile, JPMorgan is also preparing to allow institutional clients to use Bitcoin directly as collateral for loans by the end of 2025. The bank currently accepts only crypto-linked ETFs. The expansion signals rising comfort with direct digital-asset exposure within regulated lending frameworks.
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