According to Jared Gross, head of institutional portfolio management at JPMorgan Asset Management, large institutional investors are still generally avoiding the cryptocurrency market because of the volatile nature of the asset class.
The head of institutional portfolio strategy at JPMorgan said that asset class volatility continues to be difficult for money managers.
According to Gross, “Crypto as an asset class is effectively nonexistent for most large institutional investors” because of “the volatility is too high and the lack of an underlying return that you can point to.”
It’s unlikely that this will happen anytime soon, but according to Gross, the majority of institutional investors are currently “breathing a sigh of relief that they didn’t leap into that market.”
According to Gross, it is “self-evident” that this is not the case, and the bear market put an end to the notion that Bitcoin might be a type of digital gold or act as an inflation hedge.
The crypto market has seen a year of sharp declines. By the end of December, Bitcoin had dropped from $47,700 in January to under $17,000, while Ether had dropped from $3,700 to $1,200 during the same time period. According to CoinMarketCap, the overall market value of cryptocurrencies fell from $2.2 trillion to almost $810 billion.
Although it is still possible for institutional investors to exclude bitcoin from their portfolios, major financial institutions are increasingly doing so. The oldest American bank, BNY Mellon, declared in October that it would protect Bitcoin and ether for a limited number of institutional clients. The French bank Société Générale also got regulatory authorisation to offer services for digital assets.
According to Cointelegraph, BNY Mellon CEO Robin Vince stated that “customer demand” was the “tipping point” for the introduction of institutional-focused crypto services.
Nearly 43 million Americans, or 13% of the population, have possessed crypto assets at some point in their life, according to a new JPMorgan Chase analysis. Since it was just 3% before 2020, the number has increased significantly.
