JPMorgan says XRP, SOL and ADA inclusion in US crypto reserve 'would be difficult'

The likelihood of a U.S. strategic crypto reserve gaining approval is below 50%, and tokens like XRP, Solana (SOL) and Cardano (ADA) would likely not be included, according to JPMorgan.

"We don't believe an approval of a U.S. strategic crypto reserve is the most likely scenario (assuming congressional approval would be needed). So the chance is less than 50% in our mind," Nikolaos Panigirtzoglou, managing director of global market strategy at JPMorgan, told The Block.

"And if a US strategic crypto reserve is eventually approved, it would be difficult to include smaller tokens outside bitcoin and ethereum, as we argued in the report the inclusion of such tokens would raise more concerns about risk and volatility," Panigirtzoglou added.

JPMorgan's report, published Wednesday, noted that crypto markets initially rebounded sharply following President Donald Trump's proposal to include XRP, Solana (SOL) and Cardano (ADA) — alongside Bitcoin (BTC) and Ether (ETH) — in a potential strategic crypto reserve . However, the announcement was quickly met with market skepticism regarding both congressional approval and the feasibility of including smaller tokens.

The report also pointed out that similar state-level proposals for bitcoin reserves have already failed in Montana, North Dakota, South Dakota and Wyoming, where lawmakers cited risk and volatility concerns.

Globally, central banks have also been hesitant. The Swiss National Bank and Poland's central bank have rejected bitcoin as a reserve asset, while Singapore has dismissed cryptocurrencies as incompatible with its long-term investment strategy.

"In addition, the European Central Bank's criticism of bitcoin reserves highlights the broader skepticism among policymakers about the adoption of cryptocurrencies as reserve assets," the report added.

'Crypto markets likely to remain under pressure'

Doubts over a U.S. strategic crypto reserve, along with record crypto ETF outflows and other market factors, are contributing to near-term downward pressure in crypto markets, according to JPMorgan analysts led by Panigirtzoglou.

Bitcoin fell nearly 20% in February, accompanied by $3.5 billion in outflows from spot bitcoin ETFs — the largest monthly outflow since their launch. The analysts noted that retail investors played a significant role in the decline, while futures data suggests institutional investors are also unwinding positions. Meanwhile, momentum traders have started building up short bets, adding to downside risk, according to the analysts.

Caution is also evident in capital markets. Strategy's (formerly MicroStrategy) latest $2 billion convertible debt issuance raises concerns about demand saturation, with increasingly investor-friendly terms signaling waning enthusiasm, the analysts noted. With Strategy's stock down 40% from its November peak and crypto miners raising large amounts of debt and equity, appetite for new fundraising could decline further, the analysts said.

Overall, with no immediate positive catalysts, crypto markets are likely to remain under pressure in the near term, according to the analysts.