Private Blockchains Pose Long-Term Threat to Bitcoin and Ethereum

The expansion of private blockchains poses a significant threat to Bitcoin and Ethereum's long-term prospects, according to research from MEXC Ventures. The analysis suggests that traditional financial institutions prefer permissioned networks due to their regulatory-friendliness in areas such as payments, settlements, and tokenization of real-world assets (RWA). This preference may limit the institutional utilization of public blockchains like Bitcoin and Ethereum.

Large holders' potential selling has been highlighted as a short-term variable that could shake Bitcoin's price. However, JP Morgan analysts have categorized this as a 'secondary issue.' They note that the selling pressure is inevitable, but it is not seen as a threat to the very existence of the Bitcoin ecosystem.

The real asset tokenization (RWA) market is at a significant crossroads, with many early-stage projects implemented on Ethereum. As institutional demand grows, JP Morgan's analysis suggests that issuance, custody, and settlement functions may shift to private infrastructure that easily meets confidentiality, identity verification, and governance requirements.