JPMorgan Asset Management’s senior strategist Jared Gross said institutions might not be interested in investing in crypto assets due to the current scenario in the crypto market. He said digital assets are considered “effectively nonexistent” for investors.
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 so anytime soon.”
JPMorgan Chase released a report, “The Dynamics and Demographics of US Household Crypto-Asset Use.” As per the report “Most individuals who transferred money to crypto accounts did so when crypto-asset prices were significantly higher than recent levels, and those with lower incomes likely made purchases at elevated prices relative to higher earners.”
In an interview on CNBC, JPMorgan Chase shared his thoughts on crypto. He is mostly a critic of cryptocurrencies and Bitcoin, so he said, “I think crypto is a complete sideshow. And you guys spend too much time on it, and I have made my views perfectly clear: crypto tokens are like pet rocks.”
Why are investors afraid to invest in the crypto industry?
This year is marked as unlucky for the crypto market. Investors and crypto users faced the worst bear markets in the past few months due to the sudden collapse of FTX, Terra, and Celsius Network. More than 1 million investors lost their savings from FTX’s sudden collapse.
To overcome the inflation this year, the Federal Reserve and major central banks raised the interest rate. The United States central bank has raised interest rates by 75 basis points – four times – in a bid to tame record-high inflation. Analysts predict future interest rates raise by 50 basis points or 0.50 percent.
The president and macro strategist at Bianco Research, Jim Bianco, said the United States federal reserve would not help cryptocurrencies’ price growth.
GBTC discount rate nears 50%, crypto investors worry about another sell-off
Cryptocurrency trust Grayscale (GBTC) is offering a discount of over 50% off. Market experts, crypto analysts and investors are worried that the discount may cause a sell-off. Currently, the GBTC stock is trading at 8.10% lower. The major events like Genesis seizing withdrawals and GBTC were offering discounts up to 45% slightly affected the industry growth. On November 18, Grayscale said they didn’t want to share Proof-of-Reserves with the users.
Source: https://www.thecoinrepublic.com/2022/12/26/jpmorgan-senior-strategist-says-institutions-are-not-interested-in-digital-assets/