Crypto Markets Lingering in Shadow of FTX Collapse: 8% of Institutions Trade Crypto
• J.P Morgan survey of 835 institutional investors found that only 8% trade crypto, while 72% have no plans to do so.
• The reluctance to enter the crypto markets might be connected to the collapse of FTX and the regulatory uncertainty surrounding the industry.
• 46% of respondents said that volatility in markets is the biggest trading challenge in 2023.
J. P Morgan Survey: Institutional Investors Reluctant to Trade Crypto
A survey conducted by banking giant J. P Morgan found that only 8% of institutional investors are currently trading cryptocurrencies, while 72% expressed no interest in doing so. This reluctance to enter the market may be due to the collapse of FTX and other bankruptcies, as well as ongoing regulatory uncertainty around cryptos.
FTX Shadow Still Lingers
When Sam Bankman-Fried’s exchange, FTX, collapsed, it caused a 27% drop in Bitcoin (BTC) prices down to $15,500. Other crypto traders like Three Arrows Capital, Celsius, Genesis and Terra Luna have also gone bankrupt or been accused of illegal activities – all contributing to an overall negative perception of digital assets amongst institutional investors.
Volatility Seen As Biggest Trading Challenge
46% of respondents said that volatility in markets is their biggest challenge when it comes to trading in 2023 – a sentiment which could be further exacerbated by continued instability within the cryptocurrency space.
Institutional Interest In Blockchain Tech Decreasing
The survey results suggest decreasing interest amongst institutions for blockchain technology over time; while last year 25% named it as most influential for trading over three years, this year it only received 12%. Artificial intelligence (AI) and machine learning on the other hand saw increased support from 53%.
Conclusion
Overall, institutional investors appear reluctant to engage with cryptocurrency markets due to issues such as volatility and lack of trust related to recent bankruptcies and regulatory uncertainty – coupled with increasing focus on AI instead of blockchain technology for future investments..