- Interest from institutional investors is yet to be in crypto.
- Many are relieved not to be part of volatility.
- Major financial institutes are slowly deviating towards the industry.
Cryptocurrency is slowly moving towards mass adoption, but despite the buzz created around the industry and the intensive marketing could not bring Institutions to get involved. This unconnected nature has made these institutions feel relieved.
Senior investment strategist at JPMorgan said that the investors’ interest in this asset class is “essentially nonexistent.”
A major bull run started by the end of 2020 saw massive growth throughout the industry and ended by the end of 2021. It was so intense that it made BTC jump from $10,000 to its all-time high of nearly $68,000 plus.
There were rumors across the market throughout the cycle that institutions like MassMutual and One River could be joining the rat race. Citing the institutional investment influx in 2022.
Senior investment analyst at JPMorgan, Jared Gross, thinks that the interest has either vanished into thin air or seems like it did not exist in the first place. Further adding that the sharp decline in 2022 makes the majority of institutes happy that they missed out on board the train. While speaking at a Bloomberg podcast, he said:
“As an asset class, crypto is effectively nonexistent for most large institutional investors. The volatility is too high, and the lack of an intrinsic return that you can point to makes it very challenging. Most institutional investors probably are breathing a sigh of relief that they didn’t jump into that market and are probably not going to be doing it anytime soon.”
It should be noted that JPMorgan has a long history with the crypto sector, so much so that people believe that they use the bull market as a boost. Similar to what they did at the time of the MassMutual acquisition.
2022 has been a bad year for the whole industry; its leader BTC dropped almost 65% in the year, and ETH dropped from $3,700 to $1,200 in a similar time frame. The current market value of the cryptocurrency is somewhere around $810 billion, which was $2.2 trillion by the end of 2021.
Even if some institutional investors are drifting away from crypto, the good news could be that major financial institutes are rapidly adopting it. BNY Mellon, the oldest American bank, said that they would shield BTC and ETH for selected institutional clients, as per October 2022 announcement. Its CEO, Robin Vince, told that “customer demand” was the “tipping point” for the introduction of institutional-focused crypto services.
The CEO of BNY Mellon, Robin Vince, stated that the “tipping point” for the introduction of institutional-focused crypto services was “customer demand.”
Societe Generale, the French Bank, secured regulatory authorization to offer digital assets services.
Benefits for the industry
These major financial institutions command great trust among the general population, older people who have money to spend and invest still believe in traditional banking. If these big names come into the crypto industry or make the industry a part of their ongoing procedures or businesses, this could be very beneficial for the whole crypto industry.
Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.
Source: https://www.thecoinrepublic.com/2023/01/08/crypto-non-existent-for-big-institutional-investors-jpmorgan-executive/