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Asset Class Crypto

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Global financial strategist JPMorgan says that crypto is not well-known as an asset class for many institutional investors. He added, “The volatility is so high, the lack of significant returns that you can predict makes it difficult.”

JPMorgan and Corporate Investment in Crypto

JPMorgan Asset Management’s Head of Institutional Portfolio Strategy Jared Gross discussed crypto interest in the asset class investment industry with Bloomberg on Friday. Senior Investment Strategist explains:

As an asset class, crypto is effectively non-existent for many large institutional investors… The volatility is very high, there is no intrinsic return you can point to that makes it very strong. Gross added that it’s “obvious” that bitcoin hasn’t emerged as a digital gold or a safe haven as some had hoped.

He continued:

“Most investors in the industry are probably breathing heavily and have never entered this market and probably won’t anytime soon. Crypto markets have fallen sharply this year as the Federal Reserve and other major central banks around the world raised interest rates to fight inflation.”

There have been meltdowns and bankruptcies in the industry, including the latest collapse from crypto exchange FTX. Meanwhile, an increasing number of banks and financial institutions offer their corporate clients crypto products and services. Investment giant State Street, for example, said in September that it saw strong demand for crypto assets from institutional investors. Nasdaq recently created a crypto group called “Nasdaq Digital Assets,” citing increased demand among corporate investors.

Also, a study published in November by the crypto exchange Coinbase showed that institutional investors increased their shares during the crypto winter. The company said that there are “strong signals of acceptance of crypto as an asset class”.

A study by the financial giant Fidelity published in October showed that 74% of investors in the company surveyed are considering investing in digital assets.

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