Rat Poison: Cryptocurrency Is Yet To Excite Institutional Investors!

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Just a few days ago Andrew Bailey, the Governor of Bank of England, released precautionary advice to everyone in a strong-worded statement against the notion of investment in cryptocurrency. Now another report depicts that majority of institutional investors don’t have any confidence in cryptocurrency now.

A recent report from JP Morgan gives another jolt to the cryptocurrency market as it paints a disappointing picture about the enthusiasm about cryptocurrencies among institutional investors. Only 10% of those investors, surveyed by the investment firm JPMorgan, are involved in cryptocurrency trading.

The report concludes that Cryptocurrency has, until now, failed to excited institutional investors despite all the hype, discussions and developments like Tesla, Microsoft, PayPal putting their weight behind cryptocurrency.

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Cryptocurrency Investment: The Big Picture

  • Bitcoin was first labelled as ‘rat poison squared‘ by the oracle of Ohama Warren Buffett.
  • One-third of those investors who participated in the JPMorgan Survey agreed with Warren Buffett view.
  • Nearly 16% of those investors believe that cryptocurrency is a temporary fad.
  • 80% of those institutional investors who didn’t invest in cryptocurrency has no plan to invest in crypto in near future.
  • 20% of those investors who participated in the survey fear strict regulations on cryptocurrencies in various countries.
  • 95% of all investor participants indirectly blame increasing frauds related to cryptocurrency that influence their decision to maintain distance for now.
  • The survey was conducted during JPMorgan’s Macro, Quantitative and Derivatives conference. Nearly 3,000 investors from 1,500 institutions attended the conference.
  • Interestingly, 40% of the investors showed interest in the cryptocurrency market and have active invested in cryptocurrency in their personal capacity.
  • Another report highlights that nearly $5.9 billion is invested in US-based crypto and blockchain startups during 1H 2021, surpassing the total investment made in the whole of 2020. However, the figure is still minuscule as compared to the total investment amount of $158 billion that was made in startups in the US during 2020.

Food For Thought

The global cryptocurrency market is going through a tough time as many countries are cracking down on cryptocurrencies traders and miners. China, which has the maximum number of crypto exchanges in the world, is coming down heavily on cryptocurrency exchanges. India, on the other hand, is still taking ultra-precautionary measures, like screening every transaction, strict KYC norms, that is keeping crypto enthusiasts away.

The extreme volatility of the cryptocurrency market is another reason why Institutional investors are not getting excited about it. The crash of Bitcoin which wiped off over $1 trillion from the global crypto market is a big enough reason behind investors’ cold response to cryptocurrency.

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