JPMorgan analysts say the principal long-term threat to bitcoin is the rise of private blockchains that operate without public tokens.

Shift toward closed financial networks

Banks increasingly prefer closed infrastructures for tokenization, payments and settlements due to KYC requirements, privacy, scalability and regulatory constraints. These private systems can bypass public networks and their native tokens, creating direct competition with established blockchains such as Ethereum.

Market for tokenized assets

Analysts estimate that the market for tokenized assets could reach about $50 billion and largely develop within financial institutions’ own networks. In this scenario, public blockchains may be relegated to distribution roles, inter-network interoperability and limited secondary trading.

Implications for bitcoin and public chains

According to JPMorgan, the growth of private networks reduces some demand for public-chain tokens and shifts settlement volume away from open systems. The bank cautions that this structural change represents a material long-term risk for cryptocurrencies that rely on public network adoption.

JPMorgan’s assessment highlights how regulatory and operational preferences among institutions could reshape where tokenized activity and liquidity concentrate in the coming years.