JP Morgan senior investment strategist Jared Gross has said institutional investor interest in cryptocurrency is “essentially absent.”
Intense marketing in the industry has been successful in promoting crypto adoption, with millions of users recorded in 2022. However, the industry needs a better strategy to get big institutional investors involved.
The year 2020 saw massive growth in the industry, with the value of BTC jumping from $10,000 to $68,000 and higher. Unfortunately, the intense bull run ended in late 2021.
In 2022, BTC, the industry leader, fell almost 65 percent throughout the year, and ETH, the second most popular cryptocurrency, dropped from $3,700 to $1,200 in the same period.
The crypto market cap is currently around $810 billion, falling from $2.2 trillion a year ago.
Majority of institutional investors happy to ‘miss the train’
Gross believes the sharp decline of the crypto market in 2022 makes most institutional investors happy they approached the industry with caution.
“As an asset class, crypto is virtually non-existent for most large institutional investors. The volatility is too high and the lack of an intrinsic return to point to makes it very difficult,” Gross told Bloomberg.
“Most institutional investors are likely to breathe a sigh of relief that they have not jumped into this market and are unlikely to do so anytime soon.
Even if some institutional investors avoid crypto, major financial institutions such as Societe Generale, a multinational financial services company from France, are adopting it.
Robin Vince, CEO of the U.S.’ oldest bank BNY Mellon, said they would protect BTC and ETH for certain institutional clients. Back in October 2022, the bank announced its Digital Asset Custody platform, allowing select clients to hold and transfer cryptocurrency.
Vince said that customer demand is a turning point for the introduction of institutional-oriented crypto services, and the tipping point of institutional crypto services adoption is customer demand.