Strategy's (MSTR) Bitcoin (BTC) sales aren't the apex cryptocurrency’s biggest problem, JPMorgan reportedly said in a note to investors on Thursday. It stated that a bigger structural risk is building with traditional finance adopting blockchain technology in ways that sidestep public, permissionless networks like Bitcoin and Ethereum (ETH) entirely.

"We do not see Strategy as the main structural threat to bitcoin," the analysts said, according to a report by The Block. "In our view, the more important risk to bitcoin stems from the broader crypto ecosystem and from blockchain adoption within traditional finance continuing to develop in ways that bypass public permissionless networks."

The call marks a shift from JPMorgan's own reporting earlier this month, when analyst Nikolaos Panigirtzoglou warned that  for preferred dividends created "avoidable" two-way flow risk for the market, given the company's roughly 4% share of circulating BTC supply. This latest note reframes that concern as secondary to a bigger, slower-moving threat.

MSTR Stock Lags Bitcoin’s Gains 

gained 1.3% in the last 24 hours to trade at around $62,600, while  edged 0.7% higher in midday trade. Retail sentiment around both continued to trend in ‘bullish’ territory over the past day.

Retail traders on Stocktwits anticipated that executive chairman Michael Saylor is likely to keep dumping Bitcoin and diluting the stock.

Why The CLARITY Act May Not Help Bitcoin

JPMorgan analysts said that even if the CLARITY Act passes later this year, it may not resolve the broader risks faced by Bitcoin. They stated that regulatory clarity could accelerate bank-issued tokenized deposits, strengthening incumbent financial institutions while crowding out public blockchain-based stablecoins, rather than expanding room for open networks.

The note pointed to real-world asset tokenization, currently a roughly $50 billion market with meaningful activity on Ethereum, as “early experimentation” rather than where the market ultimately settles.

Ethereum’s price edged only 0.5% higher in the last 24 hours to around $1,730, with retail sentiment around the leading altcoin trending in ‘bullish’ territory over the past day on Stocktwits.

According to JPMorgan, the only saving grace for Bitcoin would be a hybrid model where public and private chains coexist, stronger stablecoin adoption under favorable regulation, or Bitcoin continuing to trade as "digital gold" regardless of how the broader ecosystem evolves.