Cryptocurrency markets are likely to remain under pressure in the short term due to a lack of positive catalysts and skepticism about whether Congress will approve an American strategic cryptor reserve, JPMorgan said (JPM) in a research report on Wednesday.
“Not only is there skepticism for congressional approval for such a strategic cryptor reserve, but also the possibility of including less tokens outside Bitcoin (BTC) and Ether (ETH) considering their high risk and volatility,” wrote analysts led by Nikolao’s Panigirtzoglou.
On Thursday, President Donald Trump instructed his administration to set up a Bitcoin strategic reserve to keep the assets that have been seized by the government. He also called for a storage of other crypto assets without naming those to be included despite mentioning XRP, Solana (Sun) and Cardano (ADA) earlier this week.
JPMorgan noted that talking about Bitcoin cluttering in strategic state -level reserves has also failed to receive support.
States, including Montana, North Dakota, South Dakota and Wyoming, have all rejected such proposals due to “risk and volatility,” the report said.
The world’s central banks are equally warnings to include the world’s largest cryptocurrency in their reserves.
The Swiss National Bank (SNB) and the National Bank of Poland have refused to add Bitcoin to their reserves, instead of choosing more stable assets like gold, noted JPMorgan.
Singapore also rejected the idea. “Cryptocurrencies are not in line with [the bank’s] Long -term investment strategies because of their speculative nature, “it said.
The European Central Bank (ECB) has criticized the idea of Bitcoin as a reserve asset, and this is a sign of wider skepticism among policy makers to use cryptos as reserve assets, the report added.
Read more: Trump’s strategic crypto reserve is a positive, the market has taken it wrong, says Bitwise
