Institutional Demand for Bitcoin and Ethereum Weakens as Market Awaits Policy Shifts

JPMorgan reports that institutional interest in Bitcoin and Ethereum futures is waning, leaving the crypto market in a vulnerable position.

Analysts point to weakening demand, with futures prices nearing backwardation—a sign that institutional investors are stepping back. This typically indicates a lack of confidence, as futures contracts usually trade at a premium in strong markets.

Several factors are driving this trend, including the delay in pro-crypto policies expected under the Trump administration, institutional profit-taking after recent gains, and a lack of momentum from systematic funds like CTAs. Without immediate catalysts, the market faces a cooling period, though a potential policy shift later in the year could reignite investor confidence.

JPMorgan’s analysts suggest that until there is greater regulatory clarity or new institutional inflows, Bitcoin and Ethereum may struggle to sustain upward momentum. The bank also notes that while long-term sentiment remains positive, the current lack of speculative interest could keep prices range-bound in the near term.

Despite the current slowdown, some investors remain optimistic that once clearer regulations and favorable policies take effect, institutional demand will rebound. The market’s performance in the coming months will largely depend on whether these anticipated policy changes materialize and how quickly institutional players re-engage with the sector.

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