The corporate portfolio manager of JPMorgan stated that volatility in the cryptocurrency market is still a problem for money managers.
“Large institutional investors ignore the cryptocurrency market”
JPMorgan executive Jared Gross told Bloomberg on Dec. 22 that large institutional investors still largely stay away from the cryptocurrency market, as volatility poses a challenge for money managers. “Crypto as an asset class is virtually non-existent for most large institutional investors,” Gross says. He also explains that “the volatility is so high that there is no intrinsic return you can point to which makes it very difficult.”
The JPMorgan executive believes that most institutional investors are currently “sighing a sigh of relief because they haven’t entered the market.” He also says that this is unlikely to happen anytime soon. Gross also emphasized that the current bear market has ended Bitcoin’s status as an “inflation hedge”. The leading cryptocurrency has lost 75% since its November 2021 peak. High-profile bankruptcies of the year were effective in the decline.
cryptocoin.comAs you follow, 2022 was a year of dramatic declines for the crypto market. As of this writing, Bitcoin has dropped below $17,000 at the end of December from $47,700 in January. Ethereum dropped from $3,700 to $1,200 in the same period. According to CoinMarketCap, the total value of the total crypto market has dropped from $2.2 trillion to nearly $810 billion.
Report shows support from big firms, though institutional investors are uninterested
Cryptocurrencies are still outside of many institutional portfolios. Still, reports show that major financial institutions are increasingly adopting it. In October, the oldest American bank, BNY Mellon, announced that it would offer Ethereum and Bitcoin for select institutional clients. Additionally, France’s Société Générale bank has received regulatory approval as a digital assets service provider.
More recently, Robin Vince, CEO of BNY Mellon, stated that “customer demand” is the “overflow point” behind the launch of enterprise-focused crypto services. According to a recent report from JPMorgan Chase, approximately 43 million Americans, or 13% of the population, have owned cryptocurrencies at least once in their lifetime. While the figure was only around 3%, it has increased significantly since pre-2020.
The report also weighed in on whether certain demographic groups are more likely to buy crypto. It found that men of all ages buy significantly more crypto than women. On the other hand, he found that younger people buy significantly more than older people. For example, over 25% of millennials buy cryptocurrencies. Whereas only about 12% of millennial women and 5% of baby boomer men own crypto.
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