JPMorgan, one of the well-known investment banks, recently said that institutional investors don’t consider crypto an asset class. This is because crypto is just too volatile right now, and the lack of any return right now makes investment in crypto quite a difficult choice. And now, with all the chaos in the markets right now because of the FTX collapse, things have become even worse.
JPMorgan on institutional crypto investments
Jared Ross, the head of the institutional portfolio strategy at JPMorgan, recently talked about crypto and institutional investments on Bloomberg. He commented that even though we have called Bitcoin digital gold, it has not proven itself yet. The market has been disappointing in 2022. For most investors, the current volatility and the lack of return don’t make sense to view cryptocurrencies as an asset class.
Ross also said that many investors are relieved that they haven’t jumped on the bandwagon of crypto and won’t be doing it anytime soon. If these investors did, they would be facing huge losses right now. It is difficult to say when the crypto markets will jump back; Will it be the next halving? or for the first time, will we see this trend break? Let’s see!
Crypto is in trouble
The things that happened in the crypto market in 2022 have changed a lot of things. First, we saw the collapse of the stablecoin UST and Luna coin, which led to the downfall of many lending platforms. Many users lost a lot of money which again took away the trust of the crypto markets. And now the biggest fraud in the history of the US has been orchestrated by Sam Bankman Fried. The second largest crypto exchange, FTX, was under his control, leading to users losing $8 billion to $10 billion.
It was found that Alameda Research, the firm that was linked with FTX, swindled customer funds by engaging in wreckless margin trading, loaning money, and making non-sensible investments. Sam Bankman Fried and the company’s top executives also made many real estate investments in several countries.
What are your thoughts as JPMorgan says that institutional investors don’t consider crypto as an asset class? And do you think this will change again in the bull run? Let us know in the comments below. And, if you found our content informative, share it with your family and friends.
Also Read: US Senator wants to establish the regulatory framework for stablecoin payments.
