Asset class volatility still poses a challenge for fund managers, noted JPMorgan’s Head of Institutional Portfolio Strategy.
Large institutional investors are still largely on the fringes of the crypto market as volatility in the asset class poses a challenge for fund managers, said Jared Gross, head of institutional portfolio strategy at JPMorgan Asset Management. , to Bloomberg.
“As an asset class, crypto is virtually non-existent for most large institutional investors,” Gross noted, explaining that “the volatility is too high, the lack of an intrinsic return to point to makes the task very difficult.”
Gross believes that most institutional investors are “right now breathing a sigh of relief that they haven’t entered this market,” which is unlikely anytime soon.
The bear market also ended the idea that Bitcoin
Bitcoin
ticker below
$16,855
could be a form of digital gold or serve as a hedge against inflation, Gross noted, saying it was “obvious” that wasn’t the case.
Related: FTX turmoil amplifies the industry scrutiny institutional investors have been waiting for
It has been 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 in late December, while ether
ETH
ticker below
$1,220
rose from $3,700 to $1,200 over the same period. According to CoinMarketCap, the total crypto market cap has grown from $2.2 trillion to nearly $810 billion.
Although cryptocurrencies are still excluded from many institutional wallets, major financial institutions are increasingly embracing them. In October, the oldest US bank, BNY Mellon, announced it would protect ether and bitcoin for certain institutional clients. In addition, French bank Societe Generale has 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 adoption 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 lives. The number has increased significantly since before 2020, when it was only around 3%.
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