It is likely that cryptocurrency markets remain under pressure in the short term due to the lack of positive catalysts and skepticism on whether Congress will approve a strategic Crypto reserve of the USA. UU., JPMORGAN (JPM) said in a research report on Wednesday.
“There is not only skepticism about the approval of Congress for such a strategic encryption reserve, but also the viability of including smaller chips outside Bitcoin (BTC) and Ether (ETH) given its high risk and volatility,” wrote the analysts led by Nikolaos Panigirtzoglou.
On Thursday, President Donald Trump ordered his administration to establish a strategic Bitcoin reserve to maintain assets that have been seized by the government. He also requested a reserve of other cryptography assets, without appointing those who should be included despite mentioning XRP, Solana (Sol) and Cardano (ADA) at the beginning of the week.
JPMorgan said that Bitcoin’s inclusion conversations in strategic reserves at the state level have also not managed to obtain support.
The states such as Montana, Dakota del Norte, Dakota del Sur and Wyoming have rejected such proposals due to “risk and volatility” concerns, according to the report.
The world’s central banks are equally warnings about including 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 reservations, instead of opting for more stable assets such as gold, Jpmorgan said.
Singapore also rejected the idea. “Cryptocurrencies do not align with [the bank’s] Long -term investment strategies due to its speculative nature, “he said.
The European Central Bank (ECB) has criticized Bitcoin’s idea as a reserve asset, and this is indicative of broader skepticism among political leaders about the use of Cryptos as reserve assets, the report added.
Read more: Trump’s Cryptographic Strategic Reserve is positive, the market has been wrong, says Bitwise
