JPMorgan’s reported plan to offer crypto trading to institutional clients could end up enlarging the market — and even accelerating business for existing crypto platforms — rather than simply muscling them out, analysts say. “If JPMorgan offers crypto trading to institutional clients, it will be a big positive to the space,” Owen Lau of ClearStreet told analysts. Lau argues the move would further legitimize digital assets and open major new distribution channels, creating a “domino effect” that draws other banks in. Crucially, JPMorgan would likely act as a broker, not a replacement exchange — meaning it could route orders to established institutional venues such as Coinbase Prime and Bullish. Those platforms, which already offer institutional-grade execution and settlement, could capture more flow as the big banks onboard traditional clients. But Wall Street’s entry also raises competitive pressure. Compass Point analyst Ed Engel notes that while increased bank involvement “broadens the addressable market for digital assets,” it also intensifies rivalry. Higher institutional participation should lift trading volumes across spot and derivatives, and boost demand for lending and custody — areas where crypto-native firms have already built infrastructure. At the same time, Engel warns, simpler, lower-touch services like basic spot trading may face downward fee pressure, and companies such as Coinbase and Circle Financial could see margin compression. Some firms look particularly well positioned. Engel highlights Galaxy Digital as a likely beneficiary given its focus on principal trading, derivatives and high-touch prime brokerage services. Bullish is also well placed to gain, thanks to its low spot fee structure and institutional offerings. Meanwhile, Coinbase Prime’s deep custody and execution stack makes it a natural counterpart for banks that want to route institutional order flow to specialist venues. In practical terms, the new dynamic could play out like this: a pension fund routes a crypto trade through JPMorgan for compliance, client relationships, and reporting — but the bank executes or settles that trade on Coinbase Prime or Bullish. The net effect: more institutional demand funneling into the crypto “plumbing,” increasing liquidity and reinforcing the role of specialist platforms. JPMorgan has not formally confirmed a launch of institutional crypto trading services. Still, the bank has warmed to the sector in recent years — from piloting its blockchain-linked JPM Coin to exploring blockchain-based settlement tools — making such a move seem increasingly plausible. Bottom line: big banks entering crypto should expand the pie for digital assets and validate institutional demand, but they may also shift the competitive battleground toward execution, custody and prime services where crypto-native firms hold operational advantages. For platforms like Coinbase, Bullish and Galaxy, that could mean more volume and a chance to become the backbone of Wall Street’s crypto flows — even as margins on routine spot services come under pressure. Read more AI-generated news on: undefined/news