In what is certainly an important development for the market as a whole, JP Morgan has reported that 78% of institutional traders are not interested in crypto. Indeed, the interesting results have come from a 2024 survey whose results have just been shared with the public.
In that survey, JP Morgan spoke to more than 4000 financial market participants. Although the number of firms set to embrace crypto has increased, many are disinterested in exposing their holdings. Moreover, the percentage of traders not seeking to trade cryptocurrencies is an increase from 2023’s figures.
JP Morgan Survey Shows Disinterest in Crypto from Institutional Traders
For many digital asset investors, 2024 was set to be the year of Bitcoin. After 2023, anticipation for the assets’ performance over the next year was at a fever pitch. With Spot Bitcoin ETFs nearing approval, many saw renewed all-time highs in the assets term future. Subsequently, many perceived that to be a massive benefit to cryptocurrencies as an industry.
However, that has not yet taken place. Although there is no denying how the asset has bounced back from a slow start to the year, already surpassing $50,000. Still, the rush of adoption certainly doesn’t seem to be present. That is seen ever clearer in a recent survey.
Indeed, JP Morgan reported that a remarkable 78% of institutional traders have no interest in crypto. Speaking to more than 4000 financial market participants, the majority had no plans to trade crypto/ digital coins. Moreover, the survey shows that only 12% have plans to trade digital assets within the next five years.
Alternatively, the report noted that 9% of those traders had currently been trading cryptocurrencies. That figure noted an increase of 1% over last year when the FTX collapse was in full swing. It appears as though the lack of clear regulation in the United States was a key reason why many had steered clear of the asset.
Blockchain Technology Falling Out of Favor?
The data also shows that no firm that is currently not trading digital assets had planned on doing so within the next five years. Conversely, when asked about the next great technology to impact trading, 61% pointed to artificial intelligence. Alternatively, only 7% stated it was blockchain technology.
The data is likely a byproduct of a period of uncertainty surrounding cryptocurrencies. The fall of firms like FTX and Terraform Labs certainly doesn’t imbue incoming participants with confidence. Moreover, the regulatory concerns and lawsuits driven by the US Securities and Exchange Commission (SEC) add to the worry.
Additionally, there have been a plethora of hacks connected to digital asset security. Last year alone, $2.61 billion was lost due to security breaches. While this is a fact of any technology, certain public officials have also spoken of the asset class as a haven for criminal activity. People like Elizabeth Warren have not silenced her ongoing crypto crusade.
Only time will tell if the narrative will start to shift. The 11 Spot Bitcoin ETF approvals at the start of the year are certainly a good start. As the industry continues to expand and grow, institutional investment is likely to come back around. Especially after the rather difficult year that preceded 2024.