JPMorgan: U.S. Strategic Crypto Reserve Faces Congressional Hurdles, XRP, SOL, and ADA Inclusion "Difficult"

Key Takeaways:JPMorgan assigns less than a 50% chance of a U.S. strategic crypto reserve gaining congressional approval.Inclusion of XRP, Solana (SOL), and Cardano (ADA) would be difficult due to risk and volatility concerns.Market skepticism remains high, with crypto ETFs experiencing record outflows, intensifying downward pressure on Bitcoin and altcoins.JPMorgan: Congressional Approval for U.S. Crypto Reserve UnlikelyAccording to JPMorgan analysts led by Nikolaos Panigirtzoglou, the approval of a U.S. strategic crypto reserve is improbable, citing congressional challenges and regulatory uncertainties. While President Donald Trump has floated the idea of including XRP, Solana (SOL), and Cardano (ADA) in a national crypto reserve, JPMorgan remains skeptical, assigning less than a 50% probability of approval."If a U.S. strategic crypto reserve is eventually approved, it would be difficult to include smaller tokens outside Bitcoin and Ethereum," said Panigirtzoglou, emphasizing risk factors associated with altcoins.Why XRP, SOL, and ADA Face ExclusionJPMorgan argues that Bitcoin (BTC) and Ethereum (ETH) are the only assets likely to be considered, while smaller cryptocurrencies face:High volatility, making them unreliable as reserve assets.Regulatory uncertainty, particularly concerning XRP’s history with the SEC.Liquidity concerns, as Bitcoin and Ethereum dominate trading volume and institutional adoption.The report highlights previous failures of state-level Bitcoin reserve proposals in Montana, North Dakota, South Dakota, and Wyoming, where lawmakers rejected the idea due to volatility and risk concerns.Globally, central banks remain hesitant, with the Swiss National Bank, Poland’s central bank, and Singapore’s monetary authority all rejecting crypto reserves. Meanwhile, the European Central Bank (ECB) remains critical of Bitcoin’s inclusion in sovereign reserves, according to The Block.Crypto Market Under Pressure Amid ETF Outflows & Institutional UnwindingJPMorgan analysts also pointed to record crypto ETF outflows as a major contributor to recent market weakness:Bitcoin dropped nearly 20% in February, fueled by $3.5 billion in outflows from spot Bitcoin ETFs—the largest monthly outflow since their inception.Retail and institutional investors are unwinding positions, with momentum traders increasing short bets, adding downside pressure.MicroStrategy’s $2 billion convertible debt issuance raises concerns about demand saturation, as investor enthusiasm appears to be fading.