crypto strategy

Crypto is a non-existent asset for large institutional investors – JPMorgan exec

Large institutional investors are still largely on the sidelines of the crypto market as volatility in the asset class poses a challenge for fund managers, Jared Gross, head of institutional portfolio strategy at JPMorgan Asset Management, Told Bloomberg.

“As an asset class, crypto is effectively non-existent for most large institutional investors,” Gross noted, explaining that “the volatility is too high, the lack of an intrinsic return that you can point to makes the very difficult task”.

Gross believes most institutional investors are “breathing a sigh of relief right now that they haven’t jumped into this market,” which is unlikely to happen anytime soon.

The bear market also put an end to the idea that Bitcoin (BTC) could be a form of digital gold or act as a hedge against inflation, Gross noted, saying it’s “obvious” that’s not the case.

Related: FTX Unrest Increases Industry Scrutiny, What Institutional Investors Have Been Waiting For

It was a year of dramatic falls for the crypto market. As of this writing, Bitcoin has fallen from $47,700 in January to below $17,000 at the end of December, while Ether (ETH) rose from $3,700 to $1,200 over the same period. The total crypto market cap has grown from $2.2 trillion to nearly $810 billion, according to CoinMarketCap.

Although cryptocurrency may still be excluded from many institutional wallets, major financial institutions are increasingly embracing it. In October, America’s oldest bank, BNY Mellon, announced that it would protect Ether and Bitcoin for certain institutional clients. In addition, the French bank Societe Generale received regulatory approval as a digital asset service provider.

Robin Vince, CEO of BNY Mellon, noted that “customer demand” was the “tipping point” behind the launch of institution-focused crypto services, Cointelegraph reported.

According to a recent report by JPMorgan Chase, nearly 43 million Americans, or 13% of the population, have owned crypto assets at least once in their lifetime. The figure has increased significantly since before 2020, when it was only around 3%.