Are cryptocurrencies non-existent for institutional investors? This JPMorgan executive says that…

  • Institutional investors do not place their trust in cryptocurrencies
  • However, some major financial institutions accept and support various cryptocurrencies

Institutions have stayed away from cryptocurrencies, which has left them feeling relieved, despite the significant bull market in 2020 and 2021.

This is what a senior investment strategist does JPMorgan recently stated. He also said that these investors’ interest in the asset class is “substantially non-existent”.

The most significant cryptocurrency bull run, which saw values ​​soar to new highs, started in late 2020 and lasted for about a year. For example, during that period, the price of Bitcoin [BTC] it increased from under $10,000 to $69,000, making it a trillion-dollar asset.

Institutional investment pours into cryptocurrencies in 2022

There have been numerous rumors during this cycle that major institutions and individual investors, such as MassMutual and One River, have joined the bandwagon.

Jared Gross, a senior analyst at JPM, thought this interest faded or never existed. He attributed the same to the increase in volatility and said that in light of everything that has happened in 2022 and the sharp decline in prices, most institutions are happy to have lost last year’s gain. He said on a Bloomberg podcast,

“As an asset class, cryptocurrencies are effectively non-existent 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 are probably breathing a sigh of relief that they didn’t get into that market and probably won’t be doing it anytime soon.”

It is important to remember that JPM has a controversial history with the cryptocurrency industry. It almost seems to use bull markets to revive the market, as it did after the acquisition of MassMutual, and bear cycles to predict even more gloomy events.

Does cryptocurrency still have its chance?

The cryptocurrency market has seen a year of steep declines. Currently, Bitcoin has dropped from $47,700 in January to below $17,000 by the end of December, while Ethereum [ETH] it dropped from $3,700 to $1,200 in the same time frame. According to CoinMarketCap, the overall market value of cryptocurrencies has dropped from $2.2 trillion to nearly $810 billion.

While it is still possible for institutional investors to exclude cryptocurrencies from their portfolios, major financial institutions are increasingly embracing it. The oldest US bank, BNY Mellon, said in October it would protect Bitcoin and ETH for a limited number of institutional clients. French bank Société Générale has also obtained regulatory clearance to offer services for digital assets.

BNY Mellon CEO Robin Vince said the “tipping point” for introducing institution-focused crypto services was “customer demand.”

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