The cryptocurrency market is facing weakening demand as institutional investors reduce their interest in Bitcoin (BTC) and Ethereum (ETH) futures, according to a JPMorgan report.
JPMorgan Says Crypto Market Faces Weak Demand Awaiting Trump's Pro-Crypto Policies
The Wall Street bank noted that while long-term sentiment remains positive, short-term catalysts are lacking, leaving the market in a fragile state.
JPMorgan analysts led by Nikolaos Panigirtzoglou highlighted that both BTC and ETH futures are approaching Backwardation, a situation where the spot price of an asset trades higher than the futures price.
This is typically seen as a bearish indicator and indicates waning demand from institutional investors using regulated CME futures to gain exposure to crypto.
“If demand for Bitcoin and Ethereum futures is strong, futures should trade at a premium to spot prices, a situation known as contango,” the bank said. “However, the current move lower suggests weakening institutional appetite.”
JPMorgan cited several reasons for the slowdown in crypto demand:
- Trump’s Crypto Policies Have Not Yet Gone into Effect – The new administration’s pro-crypto stance is expected to take effect in the second half of 2025, leaving institutional investors without immediate bullish catalysts.
- Profit-Taking by Institutional Investors – With no imminent policy change, some funds are locking in profits from the recent rally.
- Weak Momentum from Systematic Funds – Weak demand from commodity trading advisors (CTAs) and other momentum-focused funds has further dampened Bitcoin and Ethereum futures activity.
While the crypto market awaits regulatory clarity, JPMorgan's report suggests a turnaround could come later in the year, especially if the Trump administration introduces favorable policies that support Bitcoin, Ethereum, and the broader digital asset industry.
For now, institutional hesitation and weak demand in futures markets point to a cooling phase, but investors will be watching closely for signs of policy-driven momentum in the coming months.
*This is not investment advice.
