JP Morgan Says 78% of Institutional Traders Not Interested in Crypto

    A recent survey by JPMorgan reveals a cautious approach to cryptocurrencies among institutional traders. While a small portion actively participate or plan to soon, the majority (78%) express no intention to enter the crypto market within the next five years.

    This survey, gauging trends in the trading sector, polled over 4,000 institutional traders globally. It highlights a significant decline in enthusiasm for blockchain technology compared to past years. Only 7% of respondents view it as the most impactful technology shaping the future of trading, down from 25% in 2022.

    Instead, artificial intelligence (AI) and machine learning emerged as the dominant forces, with 61% predicting their significant influence over the next three years. This represents an increase from 53% in 2023.

    The waning interest in crypto aligns with the industry’s cooldown after the 2021 boom, followed by crashes and bankruptcies in 2022. However, there are signs of cautious optimism. The number of active institutional crypto traders rose slightly to 9% from 8% in 2023, and 12% plan to enter the market within five years.

    Spot Bitcoin ETFs Open Floodgates for Institutions

    This may be partly due to the gradual recovery spurred by major financial players entering the scene in 2024. The much-anticipated approval of spot Bitcoin ETFs in the US offered a significant milestone for institutional investors, with firms like BlackRock, Fidelity, and WisdomTree involved. Bitcoin’s price itself has risen nearly 95% in the past year.

    It’s worth noting that despite JPMorgan’s involvement in digital assets, its CEO, Jamie Dimon, remains a vocal critic of crypto, comparing Bitcoin to a “pet rock” and advising against it.

    The survey also identified broader market concerns, with inflation (27%), the US election (20%), and recession risk (18%) being the top catalysts flagged by traders.

    Overall, the JPMorgan survey paints a picture of institutional traders approaching crypto with caution, favoring AI and machine learning for future impacts while acknowledging a gradual return of institutional interest following market recovery and major player involvement.

    It also highlights the ongoing debate surrounding crypto’s legitimacy and future, exemplified by figures like Dimon. As the market evolves, how these opposing views and trends play out will be interesting to watch.

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