Crypto Is a Nonexistent Asset Class for Most Large Institutional Investors – Featured Bitcoin News

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A strate­gist at glob­al invest­ment bank JPMor­gan says cryp­to is effec­tive­ly nonex­is­tent as an asset class for most large insti­tu­tion­al investors. “The volatil­i­ty is too high, the lack of an intrin­sic return that you can point to makes it very chal­leng­ing,” he added.

JPMorgan on Institutional Crypto Investing

JPMor­gan Asset Management’s head of insti­tu­tion­al port­fo­lio strat­e­gy, Jared Gross, dis­cussed cryp­to and insti­tu­tion­al investors’ inter­est in the asset class on Bloomberg Fri­day. The senior invest­ment strate­gist described:

As an asset class, cryp­to is effec­tive­ly nonex­is­tent for most large insti­tu­tion­al investors … The volatil­i­ty is too high, the lack of an intrin­sic return that you can point to makes it very challenging.

Gross added that it is “self-evi­dent” that bit­coin has not proven itself to be a form of dig­i­tal gold or haven asset like some have hoped. He continued:

Most insti­tu­tion­al investors prob­a­bly are breath­ing a sigh of relief that they didn’t jump into that mar­ket and are prob­a­bly not going to be doing so any­time soon.

The cryp­to mar­ket has declined sig­nif­i­cant­ly this year as the Fed­er­al Reserve and oth­er major cen­tral banks around the world raised inter­est rates to fight infla­tion. There have also been col­laps­es and bank­rupt­cies with­in the sec­tor, includ­ing the most recent fall­out of cryp­to exchange FTX.

Mean­while, a grow­ing num­ber of banks and finan­cial insti­tu­tions are offer­ing cryp­to prod­ucts and ser­vices to their insti­tu­tion­al clients. Invest­ment giant State Street, for exam­ple, said in Sep­tem­ber that it sees unwan­ing demand for cryp­to assets from insti­tu­tion­al investors. Nas­daq recent­ly estab­lished a cryp­to unit called “Nas­daq Dig­i­tal Assets,” cit­ing increased demand among insti­tu­tion­al investors.

Fur­ther­more, a sur­vey released in Novem­ber by cryp­to exchange Coin­base showed that insti­tu­tion­al investors increased their allo­ca­tions dur­ing the cryp­to win­ter. The firm empha­sized that there is “a strong sig­nal of the accep­tance of cryp­to as an asset class.” A study pub­lished by finan­cial giant Fideli­ty in Octo­ber showed that 74% of insti­tu­tion­al investors sur­veyed plan to invest in dig­i­tal assets.

What do you think about the JPMor­gan strategist’s state­ment regard­ing insti­tu­tion­al investors’ inter­est in cryp­to assets? Let us know in the com­ments sec­tion below.

Kevin Helms 

A stu­dent of Aus­tri­an Eco­nom­ics, Kevin found Bit­coin in 2011 and has been an evan­ge­list ever since. His inter­ests lie in Bit­coin secu­ri­ty, open-source sys­tems, net­work effects and the inter­sec­tion between eco­nom­ics and cryptography.




Image Cred­its: Shut­ter­stock, Pix­abay, Wiki Commons

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