Crypto Demand Slumps as Institutional Interest in Futures Declines, JPMorgan Reports
JPMorgan (JPM) has highlighted a drop in institutional demand for cryptocurrencies, with bitcoin (BTC) and ether (ETH) futures showing signs of weakness, according to a report released Wednesday.
The report pointed to a shift toward backwardation in BTC and ETH futures markets—a scenario where futures prices trade below spot prices—indicating cooling investor appetite.
“This pattern suggests that institutional investors using CME futures to gain exposure to crypto are pulling back,” wrote analysts led by Nikolaos Panigirtzoglou.
A strong market typically sees futures in contango, where prices for future contracts exceed spot rates. However, the move toward backwardation signals fading demand and dampened expectations.
JPMorgan analysts noted that while crypto-friendly policies under the Trump administration could boost sentiment, their impact is likely to be felt later in the year. In the meantime, investors may be taking profits or staying cautious due to the lack of immediate catalysts.
Additionally, reduced activity from systematic trading firms and momentum-driven funds, including CTAs, has added to the sluggish performance in BTC and ETH futures markets.
