According to JPMorgan, institutional interest in Bitcoin and Ethereum futures is declining, leaving the cryptocurrency market vulnerable.
Analysts see diminishing demand, with futures prices approaching backwardation—a warning that institutional investors are pulling back. This normally shows a lack of confidence, because futures contracts often trade at a premium in strong markets.
Several variables are driving this trend, including the anticipated delay in pro-crypto measures under the Trump administration, institutional profit-taking following recent gains, and a lack of impetus from systematic funds like CTAs. Without immediate triggers, the market will soften, but a potential policy move later this year might rekindle investor confidence.
JPMorgan analysts believe that Bitcoin and Ethereum will struggle to maintain their upward momentum unless there is better regulatory certainty or new institutional inflows. The bank also observes that, while long-term sentiment is still optimistic, the present lack of speculative activity may keep prices range-bound in the short run.
Despite the current downturn, several investors believe that if clearer laws and beneficial policies are implemented, institutional demand will recover. The market’s success in the next months will be mainly determined by whether these anticipated regulatory improvements materialize and how fast institutional investors re-engage with the sector.
