New Data Shows Most Institutional Traders Are Not Interested in Crypto
New data reveals that the majority of global institutional traders are not interested in exposing their holdings to digital assets, despite a slight increase in the number of pro-crypto firms. According to a recent JP Morgan survey of over 4,000 financial market participants, 78% of these traders have no plans to trade digital assets in the near future. This is an increase from the previous year’s numbers, where 72% stated they would not add crypto assets to their portfolios. Lack of uniform regulations in the market is cited as a possible reason for this reluctance.
Only 9% of Firms Trade Digital Assets
Out of the surveyed firms, only 9% responded positively to trading digital assets, representing a slight 1% increase from the previous year. Additionally, none of the firms currently not trading virtual assets plan on opening that division in the next five years, despite 14% expressing interest last year. However, there is still some optimism as 12% of participants this year showed interest in resuming trading digital assets.
AI Preferred Over Blockchain
When asked about the next big technology in trading, many firms pointed to Artificial Intelligence (AI) as the preferred choice over blockchain technology. While 61% voted for AI, only 7% backed blockchain technology.
Scams and Uncertainty Impact Market
The prevalence of digital asset scams and frequent hacks has hindered mass adoption and deterred institutional traders and traditional market players from entering the crypto market. In 2022 alone, the wider market lost $2 billion due to cryptocurrency bad actors. These incidents have raised concerns about the safety of user assets and attracted regulatory scrutiny.
Potential Impact of Bitcoin ETF Approval
The recent approval of spot Bitcoin ETFs by the United States Securities and Exchange Commission (SEC) has generated optimism and attracted new investment from traditional finance players. This development is expected to change the tide and potentially increase institutional interest in the crypto market.
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