Key Points:

• JPMorgan expresses concerns about whether Congress would approve a strategic reserve for cryptocurrencies.
• Several states in the U.S. have shown reluctance to adopt bitcoin as a reserve asset due to its inherent volatility.
• Countries like Switzerland, Poland, and Singapore have also dismissed the concept of a strategic crypto reserve.

Cryptocurrency markets are predicted to face short-term pressures due to a lack of favorable developments and widespread skepticism regarding Congress’s potential approval of a U.S. crypto reserve. Analysts led by Nikolaos Panigirtzoglou from JPMorgan noted:

“Concerns not only involve the likelihood of congressional approval for such a reserve, but also the practicality of incorporating smaller tokens beyond bitcoin and ether due to their heightened risks and volatility.”

Furthermore, President Donald Trump has directed his administration to establish a Bitcoin Strategic Reserve for seized assets while also considering a range of other crypto assets. However, numerous states, including Montana, North Dakota, South Dakota, and Wyoming, have opted against such proposals due to worries over risk and volatility.

Central banks globally are similarly cautious about including bitcoin in their reserves. The Swiss National Bank and the National Bank of Poland have chosen more stable assets like gold instead. Singapore commented that cryptocurrencies contradict their long-term investment strategies because of their speculative nature, echoing broader skepticism among policymakers.

Read more: Trump’s Strategic Crypto Reserve is a Positive, Market Has Got it Wrong, Bitwise Says