Investor Sentiment Down on Crypto, 72 Percent E-Traders Scared of Investments in 2023: JP Morgan Survey

The volatility of the crypto market emerged as the biggest reason that has scared hefty investors.

Written by Radhika Parashar, Edited by Manas Mitul | Updated: 2 February 2023 13:27 IST

Investor Sentiment Down on Crypto, 72 Percent E-Traders Scared of Investments in 2023: JP Morgan Survey

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The crypto sector witnessed a harsh winter in 2022 losing $200 billion

Highlights

Institutional investors may hop onboard crypto once the market stabilises
Industry experts believe institutional investments can uplift crypto
Institutional investments can also drive adoption of crypto

Last year's crypto winter left investors and players in the industry high and dry. In the aftermath of 2022's crypto quake, majority of the potential institutional investors are now fearful about engaging with virtual digital assets. In its new survey, JP Morgan has found out that 72 percent of institutional e-traders are now sceptical about experimenting with cryptocurrencies in 2023. The volatility of the crypto market emerged as the biggest reason that has scared hefty investors.

JP Morgan surveyed 835 traders from sixty international locations between January 3 to January 23 this year. It published its findings as part of the seventh edition of its e-Trading Edit survey, Cointelegraph reported on Thursday, February 2.

Out of the total respondents to this survey, 22 percent were concerned about crypto companies collapsing due to liquidity crunches and 30 percent blamed recession-related risks for keeping them out of the cryptosphere.

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Around 26 percent of the respondents also said the future of trading outcomes will be influenced by inflation.

Crypto hesitation dented the global trader sentiment after promising projects like Terra and FTX dramatically failed last year. The crash of such projects in the backdrop of post COVID-19 recession, back-to-back hack attacks, and the low-risk appetite of investors ended up costing the overall industry over $200 billion (roughly Rs. 16,38,820 crore) in losses last year.

Along with the fluctuating nature of crypto assets, the hike in interest rates introduced by the US Federal Reserve throughout 2022 has also emerged as a reason why institutional investors wish to take a moment before investing in crypto.

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In a report released last year, Capgemini had said that 71 percent of high-net-worth individuals (HNWIs) had invested in crypto. At the time, the research firm had surveyed 2,973 people with their wealth band ranging between $1 million (roughly Rs. 8 crore) to $30 million (roughly Rs. 245 crore).

Crypto industry insiders have time and again said that institutional investments in crypto can help stabilise the position of crypto assets for longer terms.

Mammoth crypto players like Binance and Coinbase have already been working on services that would focus on catering to gigantic investors.

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Further reading: Cryptocurrency, JP Morgan, Crypto Winter, FTX, FTX Collapse

Radhika Parashar

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Radhika Parashar is a senior correspondent for Gadgets 360. She has been reporting on tech and telecom for the last three years now and will be focussing on writing about all things crypto. Besides this, she is a major sitcom nerd and often replies in Chandler Bing and Michael Scott references. For tips or queries you could reach out to her at RadhikaP@ndtv.com. More