- Institutional investor interest has yet to be in cryptocurrencies.
- Many are relieved not to be part of the volatility.
- Major financial institutions are slowly drifting towards the sector.
Cryptocurrency is slowly moving towards mass adoption, but despite the hype created around the industry and intense marketing it has failed to get institutions on board. This disconnected nature has made these institutions feel relieved.
JPMorgan’s senior investment strategist said investor interest in this asset class is “essentially non-existent”.
A major bull run that began in late 2020 saw massive growth across the industry and concluded by the end of 2021. It was so intense that it blew BTC by $10,000 to its all-time high of nearly $68,000 .
There were rumors throughout the market throughout the cycle that institutions like MassMutual and One River might join the rat race. Citing institutional investment inflow in 2022.
JPMorgan’s senior investment analyst Jared Gross thinks the interest fizzled out or seems like it didn’t exist in the first place. He further added that the sharp decline in 2022 makes most institutions happy they missed the boat. Speaking on a Bloomberg podcast, he said:
“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 any time soon.”
It should be noted that JPMorgan has a long history with the cryptocurrency industry, so much so that people believe they are using the bull market as a impetus. Similar to what they did when they acquired MassMutual.
2022 has been a bad year for the entire industry; its leader BTC is down nearly 65% on the year, and ETH is down from $3,700 to $1,200 in a similar time frame. The current market value of the cryptocurrency is approximately $810 billion, or $2.2 trillion by the end of 2021.
While some institutional investors are moving away from cryptocurrencies, the good news may be that major financial institutions are rapidly embracing it. BNY Mellon, America’s oldest bank, said it would protect BTC and ETH for select institutional clients, as per its October 2022 announcement. Its chief executive officer, Robin Vince, said “customer question” it was there “point of no return” for the introduction of institution-centric cryptographic services.
BNY Mellon CEO Robin Vince said the “tipping point” for introducing institution-focused crypto services was “customer demand.”
Société Générale, the French bank, has obtained regulatory clearance to offer digital asset services.
Benefits for the industry
These large financial institutions enjoy great trust among the general population, older people who have money to spend and invest still believe in the traditional banking system. If these big names enter the cryptocurrency industry or make the industry a part of their ongoing procedures or business, it could be very beneficial for the entire cryptocurrency industry.
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