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72% of institutional traders are crypto-skeptical this year: JPMorgan

February 2, 2023 Coin Telegraph

The seventh edition of JPMorgan's e-Trading Edit asked 835 institutional traders about their plans for trading digital assets in 2023, among other topics.

A whopping 72% of institutional e-traders have signaled “no plans to trade crypto/digital coins” in 2023, according to a new survey conducted by JPMorgan.

The seventh edition of JPMorgan’s e-Trading Edit surveyed 835 traders from 60 different “global locations” about the technical developments and macroeconomic factors that will influence trading performance in 2023. The survey was conducted between Jan. 3 to Jan. 23, 2023.

The survey revealed hesitation among traders around digital assets. Only 14% of respondents said they will either continue to trade in the digital asset market or begin trading this year.

The remaining 14% of respondents, said they didn't plan on investing this year but may do so within the next five years.

92% of the institutional traders surveyed by JPMorgan did not — at the time of the survey — have any exposure to the digital asset market in their investment portfolio at the time of the survey.

*72% of institutional traders don’t plan on touching the digital asset market in 2023. Source:* *JPMorgan.*

This may be due to the fact that nearly half of the respondents cited volatile markets as the biggest challenge to perform well on a day-to-day basis.

The quantitative tightening measures imposed by the United States Federal Reserve in 2022 may have played a factor too, with 22% citing liquidity availability concerns as the most influential factor impeding trading performance.

The survey results come just months after investor and trader sentiment in the cryptocurrency market dipped following the catastrophic collapses of the Terra LUNA ecosystem and trading platform FTX in 2022.

In another JPMorgan poll, 30% of respondents cited recession risk as the most influential macroeconomic factor to look out for, while 26% believe inflation will most influence trading outcomes.

It should be noted that trading typically refers to jumping in and out of stocks or assets within weeks, days and even minutes with the aim of short-term profits, while investors have a longer-term outlook.

Last year, an institutional investor survey sponsored by crypto exchange Coinbase found that 62% of institutional investors had invested in the digital asset market from November 2021 to late 2022, seemingly undeterred by the prolonged crypto winter.

A recent study in June 2022 also found that 71% of high-net-worth individuals (HNWI) have already invested in cryptocurrencies, while many others are adopting longer-term strategies rather than trading on a day-to-day basis.

In a separate finding, the survey found that 12% of traders saw blockchain technology as the most influential technology to shape the future of trading, compared to 53% for artificial intelligence (AI) and machine learning-related technologies.

These figures are in stark contrast to 2022’s poll, where blockchain technology and AI each received 25% of all votes.

*Only 12% of institutional traders believe blockchain technology will be the most influential for trading performance. Source:* *JPMorgan.*

71% of high net worth individuals have invested in digital assets: Survey

June 16, 2022 Coin Telegraph

Capgemini

A new survey suggest most of the world's wealthiest have invested in digital assets and wealth management firms have been advised to prioritize providing education and advice.

High net worth individuals (HNWI) have embraced cryptocurrencies and other digital assets, with 71% of wealthy individuals investing in digital assets according to a new survey.

Technology consulting company Capgemini released its 2022 World Wealth Report on June 14. It polled 2,973 global HNWIs, with 54% reporting a wealth band ranging from $1 million to $30 million and 46% reporting wealth of $30 million and over.

The survey asked about investment preferences for emerging asset classes such as digital assets, classifying them as cryptocurrencies, related exchange-traded funds (ETFs), non-fungible tokens (NFTs) and metaverse-related products.

Of the roughly one in seven wealthy individuals investing in digital assets, the highest concentration were under 40. More than nine in ten in this age group have invested in digital assets. The younger cohort said cryptocurrencies are their favorite investment, with crypto ETFs and metaverse products also highly desired.

Crypto does not make up the majority of portfolios however and on average, HNWIs have only allocated around 14% into “alternative investments” which includes crypto alongside commodities, currencies private equity and hedge funds.

Capgemini observed, however, the wealth management industry is seeing an influx of investments into digital assets and this has “increased the demand for educational capabilities.”

Nilesh Vaidya, the firm's head of retail wealth management said:

“The influx of new investment avenues such as sustainable investing and digital assets is having a crucial impact on the wealth management industry. Wealth management firms must prioritize providing timely education around this trend to retain their customers.”

Some firms are already clued into this trend and are wanting the first-mover advantage into this niche sector by launching investment products targeted at the demographic.

Investment bank Morgan Stanley introduced exposure to Bitcoin (BTC) for its millionaire clientele in March 2021 with only those holding $2 million or more in capital able to invest.

Private banking clients for BBVA Switzerland were also given access to crypto trading and custody services, along with a similar offering from Wells Fargo in 2021.

The report comes after earlier research by Accenture which revealed 52% of wealthy investors in Asia held some form of a digital asset during the first quarter of 2022 making up, on average, 7% of the surveyed investors’ portfolios.

Similarly, Accenture also found that wealth management firms have been slow to adopt investment products with cryptocurrency or digital asset exposure, with a majority saying they have no plans to offer related services.

High net worth individuals

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