- JPMorgan doubts the inclusion of Ripple’s XRP in a U.S. strategic crypto reserve, citing congressional approval challenges, high volatility, and speculative trading risks.
- Additionally, XRP’s ongoing legal battle with the SEC and concerns over its stability further reduce its chances of institutional adoption.
JPMorgan has cast doubt on the inclusion of Ripple’s XRP and other altcoins in any potential U.S. strategic crypto reserve, citing significant obstacles related to congressional approval and market volatility.
Congressional Approval Remains a Major Hurdle
According to Nikolaos Panigirtzoglou, Managing Director of Global Market Strategy at JPMorgan, the chances of establishing a strategic crypto reserve in the United States are slim. “We don’t think the approval of a strategic crypto reserve is the most likely scenario assuming congressional approval is required,” he stated. He estimated the likelihood of such approval at less than 50%.
One of the primary concerns JPMorgan raised was the inherent volatility of altcoins like XRP, SOL, and ADA. Unlike Bitcoin and Ethereum, which have seen increasing institutional adoption, these smaller cryptocurrencies remain heavily influenced by speculative trading rather than real-world utility.
Altcoins and Speculation: A Risky Combination
The investment bank emphasized that cryptocurrencies are fundamentally different from traditional assets such as gold or fiat currencies. While Bitcoin and Ethereum have made progress in mainstream finance, altcoins remain tied to hype cycles rather than industrial use cases.
“XRP, SOL, and ADA are still highly dependent on retail speculation, and their prices are frequently influenced more by hype cycles than by actual adoption,” JPMorgan noted. Given this, the bank believes that including such assets in a national crypto reserve would expose it to unnecessary risks.
Legal Issues Surrounding XRP Add to Its Instability
XRP faces additional challenges due to its ongoing legal battle with the U.S. Securities and Exchange Commission (SEC). The SEC has questioned whether XRP should be classified as an unregistered security, adding regulatory uncertainty to its future. This legal backdrop, combined with concerns over manipulative trading spikes, makes XRP’s inclusion in a sovereign reserve highly unlikely.
Ripple CEO’s White House Visit Raises Eyebrows
Despite these concerns, Ripple CEO Brad Garlinghouse is set to attend a White House crypto summit. The event has sparked speculation about potential behind-the-scenes discussions on digital asset regulations. However, Pierre Rochard, a well-known Bitcoin maximalist, dismissed XRP as a “worthless token with no investor rights” and criticized the idea of a multi-token financial system where XRP would serve as a digital currency intermediary.
JPMorgan’s skepticism reflects broader concerns about the long-term stability of altcoins within institutional finance. While Bitcoin and Ethereum continue to gain traction, smaller cryptocurrencies like XRP face an uphill battle in proving their long-term viability in a regulated financial system.
