JPMorgan Survey Shows Most Investors Have Little Interest In Crypto

June 24, 2021 03:00 PM
Crypto Story of the Day

Crypto Story of the Day




Crypto was unchanged this morning on depressed spot volumes. Cardano (ADA) was the exception and was up 8%. 

Crypto Story of the Day

According to a JPMorgan survey, only 10% of surveyed institutions are “involved” in crypto. Despite significant steps towards mainstream adoption, institutional involvement remains tepid.

According to the survey conducted at the JPMorgan Macro Quantitative & Derivatives conference, half of the polled institutions also view cryptocurrencies as “rat poison” (Warren Buffet famously called BTC poison in 2018). 

The conference was attended by 3,000 investors from around 1,500 institutions. Of the firms not involved in crypto, 80% said they don’t plan to invest in the future. However, 40% of surveyed individual investors indicated that they are involved in the crypto space, while 80% of respondents expect regulators to take stricter approaches to the asset class. Finally, 95% of respondents said they believed fraud in the space was “somewhat or very much prevalent.”

Over the past several months, a number of financial institutions have expressed reservations regarding the crypto space or limited the ability of their customers to access the asset class. For example, Mansoor Bin Ebrahim Al Mahmoud, the CEO of the Qatar Investment Authority, said cryptocurrencies “need a bit of maturity before we make our view about investing in that space” at the Qatar Economic Forum this week. 

UK bank Starling barred its customers from sending funds to crypto exchanges in May. The bank cited “high levels of suspected financial crime with such payment,” but said the decision could be reversed once additional protections were in place. 

In April, Charles Schwab CEO Walt Bettinger said on a call with analysts that the institution “would like to see more regulatory clarity” in regards to crypto before offering investment services for the space. April also saw UK bank NatWest describe itself as taking a “cautious approach” to crypto and said that the institution has “no appetite” for clients involved with crypto. 

In April, we described the firms which had entered the crypto space— such as PayPal, Visa, or Tesla— as pioneers compared to their counterparts. Since then, a number of market dynamics have emerged which, for some, could have conceivably vindicated conservative views on the space. 

For example, episodes like the SHIB token reaching a USD 13 billion valuation virtually overnight in May, understandably lend to the view that crypto is a “temporary fad.” The most prominent crypto firm, Coinbase, deciding to list the questionable token could’ve been interpreted as an endorsement of such projects by the crypto community. 

The baseline for most firms’ perceptions of the crypto space remains cautious. Furthermore, the recent rally doesn’t seem to have reduced doubt over the asset class's long-term viability among many traditional financial actors.

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