JPMorgan, the huge US investment bank, has been researching institutional traders’ interest in the crypto industry. To do this, it surveyed 835 institutional traders from 60 different global locations between January 3 and 23. The results have been shared in the seventh edition of the ‘e-Trading Edit‘. It discusses the technical developments and macroeconomic factors that will influence the trading performance of the following year.
Traders skeptical about crypto
The survey revealed that traders are in doubt about digital assets. 72% of traders said they have no plans to trade crypto. 14% said they are not currently into crypto, but would like to change that within five years. Only 8% of those surveyed reported trading cryptocurrencies at the time of the survey. The remaining 6% do nothing with crypto, but plan to start trading this asset class in 2023.
The reason why a whopping 92% have no exposure to digital assets at all may be due to the fact that almost half of respondents cited volatility as the biggest challenge to performing well.
The interest rate hikes imposed by the US Federal Reserve in 2022 may also have played a role. 22% said concerns about liquidity availability are the most influential factor hindering trading performance.
Also, the demise of the Terra ecosystem (LUNA) and the bankruptcy of crypto exchange FTX will haunt the minds of the institutional traders.
In another JPMorgan survey, 30% of respondents cited recession risk as the most influential macroeconomic factor to watch out for, while 26% believe inflation will most affect trading results.
Bitcoin interest from investors
A few days ago you could read in the Bitcoin news that David Duong of Coinbase believes that there is still a huge interest from institutional investors in crypto. It is important to mention that trading involves entering and exiting assets within weeks, days or even minutes with the aim of realizing profits in the short term. Investors, on the other hand, focus on the long term. Even the collapse of FTX does not change the trend of institutional adoption, according to an optimistic Duong.