- A new survey carried out by JPMorgan reveals that nearly three-quarters of institutional traders will not mingle with digital assets this year.
- Only 14% of survey participants showed keen interest in continuing or beginning trading in cryptocurrencies this year.
- The view that blockchain technology is the catalyst to reshape finance is also in decline compared to last year, with only 12% opting for DLT over AI.
The widespread fear over the digital asset market is still present, even with recent gains recorded by several projects in recent weeks.
Banking giant JPMorgan released the seventh edition of JPMorgan’s E-Trading Edit, which comprises views obtained by surveying 835 traders from multiple global locations on macroeconomic factors, technical developments, and strategies that would shape trading in 2023.
This year’s survey shows a sharp decline in institutional traders’ interest to continue trading cryptocurrencies. 72% of the participants hinted that they have “no plans to trade digital coins” in 2023, while only 14% said they would continue trading or venture into trading for the first time this year.
The last 14% stated that they have no plans of investing this year but may do so subsequently as they continue to monitor the current market situation. The survey further showed that 92% of participants had no exposure to the digital asset market at the start of the year, with only 8% actively trading in cryptocurrencies.
Last year, research carried out by Coinbase showed that 62% of participants who were institutional investors had delved into the digital asset market. This shows that the market turmoil of the previous year has affected investors’ confidence making them sceptical about virtual currencies.
Participants cite macroeconomic factors
The survey participants cited several factors, including volatile markets as the biggest challenge to day trading and macroeconomic factors like inflation and hike in interest rates. 30% of participants stated that recession would be the biggest macroeconomic factor in 2023.
Since the survey comes in a few months after the implosion of FTX in a year riddled with increased digital asset fraud and a bearish market, a generally reduced enthusiasm was anticipated among institutional investors.
Finally, the survey also shows a declining view concerning blockchain technology as the instrumental catalyst to reshape financial trading. 12% of participants picked blockchain over artificial intelligence (AI) compared to over 50% who pitched their tents with AI. In 2022, both blockchain and AI got 25% of the votes in the survey.
