JPMorgan: Weak Demand Weighs on Crypto, Market Looks to Trump’s Initiatives for Relief

Crypto Market Lacks Strong Demand, JPMorgan Cites Institutional Weakness

Institutional positioning in crypto futures suggests weakening demand, according to a report from JPMorgan (JPM) on Wednesday.

The report highlighted that both bitcoin (BTC) and ether (ETH) futures have been nearing backwardation—a condition where the spot price is higher than the futures price—indicating lower investor appetite.

“This trend signals demand weakness among institutional investors who use CME futures to gain exposure to these assets,” said JPMorgan analysts led by Nikolaos Panigirtzoglou.

In a healthy market, futures prices typically trade at a premium to spot prices, a phenomenon known as contango. However, the bank warned that the current move toward backwardation suggests fading price expectations and softer institutional engagement.

JPMorgan attributed this downturn to multiple factors, including the delayed impact of potential pro-crypto policies from the Trump administration, which are expected to take shape later in the year. As a result, investors may be taking profits in the absence of near-term catalysts.

The report also noted that reduced activity from systematic and momentum-driven funds, such as Commodity Trading Advisors (CTAs), has further contributed to the slowdown in demand for bitcoin and ether futures.