Crypto Sector Lacks Strong Demand, Could Benefit From Trump’s Policies, JPMorgan Reports

Crypto Market Struggles With Weak Demand as Institutional Interest Fades, JPMorgan Says

A new report from JPMorgan (JPM) highlights declining institutional demand for cryptocurrency, citing weakness in bitcoin (BTC) and ether (ETH) futures markets.

The report noted that both BTC and ETH futures have been approaching backwardation—a market condition where futures prices trade below the spot price—suggesting a lack of investor confidence.

“This trend reflects softening institutional demand, particularly among investors utilizing CME futures for crypto exposure,” said JPMorgan analysts led by Nikolaos Panigirtzoglou.

Typically, a strong market sees futures trading in contango, where contracts are priced higher than spot rates. However, the current shift toward backwardation signals a more cautious outlook and reduced speculative interest.

JPMorgan suggested that the wait for potential pro-crypto policies under the Trump administration may be discouraging investors from making large commitments in the near term. With regulatory clarity and favorable policies expected to emerge later in the year, many institutions are opting to stay on the sidelines.

Additionally, lower participation from quantitative and momentum-based funds, such as Commodity Trading Advisors (CTAs), has further contributed to sluggish trading activity in BTC and ETH futures.

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