Crypto is a non-existent asset for large institutional investors

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Large institutional investors are still largely on the sidelines 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 effectively non-existent for most large institutional investors, Gross noted, explaining that the volatility is too high, the lack of an intrinsic return you can point to makes it very difficult.

Gross believes most institutional investors are “breathing a sigh of relief right now that they haven’t jumped into this market,” which is unlikely to happen anytime soon.

The bear market has also put an end to the idea that Bitcoin (BTC) could be a form of digital gold or serve as an inflation hedge, Gross noted, saying it’s “obvious” that it isn’t. not the case.

Related: FTX Unrest Increases Industry Scrutiny, What Institutional Investors Have Been Waiting For

It was a year of dramatic falls for the crypto market. As of this writing, Bitcoin fell from $47,700 in January to below $17,000 at the end of December, while Ether (ETH) fell from $3,700 to $1,200 during the same period. The total crypto market cap has grown from $2.2 trillion to nearly $810 billion, according to CoinMarketCap.

Although cryptocurrency may still be excluded from many institutional wallets, major financial institutions are increasingly embracing it. In October, the oldest US bank, BNY Mellon, announced that it would protect Ether and Bitcoin for certain institutional clients. Additionally, Frances Societe Generale Bank 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 launch 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 lifetime. The figure has increased significantly since before 2020, when it was only around 3%.

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