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News 72% of Institutional Traders Skeptical of Crypto This Year: JP Morgan

A whopping 72% of institutional electronic traders say they have “no plans to trade cryptocurrencies/digital coins in 2023,” according to a new survey conducted by JPMorgan.

The seventh edition of the JPMorgan e-Trading Edit surveyed 835 traders from 60 different “global locations” on the technical developments and macroeconomic factors that will affect trading performance through 2023. The survey was conducted between January 3-23, 2023.

Surveys show traders are hesitant about digital assets. Only 14% of respondents said they would continue to trade in the digital asset market or start trading this year.

The remaining 14% of respondents said they do not intend to invest this year, but may do so in the next five years.

Ninety-two percent of institutional traders surveyed by JPMorgan had no exposure to digital asset markets in their portfolios at the time of the survey.

72% of institutional traders do not plan to get involved in the digital asset market in 2023. source: JPMorgan.

This may be because nearly half of the respondents cited market volatility as the biggest challenge to performing well on a day-to-day basis.

Quantitative tightening measures by the Federal Reserve in 2022 may also be a factor, with 22% of respondents citing liquidity availability issues as the most influential factor hindering trading performance.

The findings come months after investor and trader sentiment on the cryptocurrency market sank following the catastrophic collapse of the Terra LUNA ecosystem and trading platform FTX in 2022.

In a separate JPMorgan poll, 30% of respondents said recession risk was the most influential macroeconomic factor to watch, while 26% said inflation would have the biggest impact on trading outcomes .

It is important to note that trading typically refers to moving in and out of a stock or asset over weeks, days, or even minutes for short-term profits, while investors look at the longer-term outlook.

Last year, a survey of institutional investors sponsored by cryptocurrency exchange Coinbase found that 62% of institutional investors invested in the digital asset market from November 2021 to the end of 2022, seemingly undeterred by the long cryptocurrency winter .

A recent study conducted in June 2022 also found that 71% of high-net-worth individuals (HNWIs) have invested in cryptocurrencies, while many others are adopting long-term strategies rather than day-to-day transactions.

related: A Beginner’s Guide to Cryptocurrency Trading Strategies

In another survey, it was found that 12% of traders see blockchain technology as the most influential technology shaping the future of trading, compared to 53% for technologies related to artificial intelligence (AI) and machine learning .

These figures stand in stark contrast to polls in 2022, when blockchain technology and artificial intelligence each received 25 percent of the vote.

Only 12% of institutional traders believe blockchain technology will have the greatest impact on trading performance. source: JPMorgan.