JPMorgan Says Tokenized Finance Could Be a Bigger Threat to Bitcoin Than MicroStrategy

JPMorgan says banks are increasingly moving settlement onto private blockchains and tokenized deposit rails, a shift that could eventually weigh on public networks like Bitcoin.

Key Takeaways

• JPMorgan sees tokenized finance on private blockchains as a bigger long-term threat to Bitcoin than MicroStrategy.
• More than 15 major banks are building permissioned networks for payments, deposits, and tokenized assets.
• JPMorgan expects institutional activity, liquidity, and capital to keep shifting from public to private blockchains.

More than 15 of the world’s largest banks are now building tokenized finance on private blockchains. JPMorgan says that trend could pose a bigger long-term risk to Bitcoin than MicroStrategy. In the bank’s view, if payments and assets increasingly move onto permissioned networks, public blockchains could gradually lose activity, liquidity, and capital.

Banks Are Building on Their Own Rails

JPMorgan’s Kinexys platform has handled more than $1.5 trillion (€1.3 trillion) in transactions since it launched in 2020, and it now processes over $2 billion (€1.7 billion) in daily volume. The platform was renamed from Onyx to Kinexys in 2024, and it highlights how far large financial institutions have already pushed blockchain use cases beyond the public crypto market.

And JPMorgan is far from alone. On the Canton Network, DTCC is tokenizing the U.S. Treasuries it holds, with a target set for 2026. HSBC has already completed a pilot involving tokenized deposits on the network, while Goldman Sachs is using the same rails to settle tokenized bonds. The Clearing House is also working with more than 15 major banks on a shared network for tokenized deposits, with a launch planned for 2027.

Why Bitcoin Could Be Hit

In its July 9 report, JPMorgan said the bigger threat to Bitcoin may not be a company like MicroStrategy, but rather blockchain adoption that bypasses public networks entirely. The analysts said banks and other institutions are more likely to favor permissioned systems because they offer clearer governance, more privacy, and greater legal certainty.

The data already points to a shift in institutional demand. Canton was among the top fee-generating chains this year and brought in about $60 million in the 30 days through the end of June, compared with $11 million (€9.6 million) for Ethereum. At the same time, public chains hold about $31 billion (€27.1 billion) in tokenized real-world assets, and roughly two-thirds of that is on Ethereum, according to rwa.xyz.

JPMorgan expects a large share of that issuance and settlement to keep migrating to permissioned rails as the market expands. The bank treats MicroStrategy as a secondary issue here: while the company holds about 4% of the Bitcoin supply, the analysts said that mainly drives short-term volatility rather than a structural threat.

Why This Matters for European Crypto

For European crypto readers, the main point is that tokenization is not just about launching new products. It is also about who controls the underlying infrastructure. If major banks keep building their own settlement and deposit networks, the role public blockchains play in institutional markets could change in ways many crypto investors are not expecting. That makes the Bitcoin debate less about price alone and more about where financial activity ends up over the next few years.

The power balance is also shifting among publicly traded bitcoin treasuries. In a recent analysis of Strategy, it was already argued that institutions will take on a larger share of buying now that MicroStrategy is no longer the clear dominant source of demand.