Last Updated on December 25, 2022 by Bitfinsider

Jared Gross, the head of institutional portfolio management at JPMorgan Asset Management, spoke about cryptocurrencies and institutional investors’ interest in the asset class on Friday. According to the senior investment expert, he said: “As an asset class, crypto is effectively nonexistent for most large institutional investors … The volatility is too high, the lack of an intrinsic return that you can point to makes it very challenging.”

According to Gross, it is “self-evident” that bitcoin has not lived up to expectations of being a haven asset or a type of digital gold. “Most institutional investors probably are breathing a sigh of relief that they didn’t jump into that market and are probably not going to be doing so anytime soon.” he added.

As the Federal Reserve and other prominent central banks hiked interest rates to combat inflation this year, the cryptocurrency market experienced a big fall. Additionally, there have been bankruptcies and breakdowns inside the industry, with the most recent one involving the troubled cryptocurrency exchange, FTX.

In the meantime, an increasing number of banks and financial organizations are providing institutional clients with crypto products and services. For instance, State Street stated in September that it anticipates a persistent demand from institutional investors for cryptocurrency assets. As a result of growing demand from institutional investors, Nasdaq recently launched a cryptocurrency unit named “Nasdaq Digital Assets.”

Additionally, according to a poll published in November by popular cryptocurrency exchange Coinbase, institutional investors raised their allocations throughout the crypto winter. The company stressed that “a strong signal of the acceptance of crypto as an asset class” is present. According to a research released in October by financial conglomerate Fidelity, 74% of institutional investors asked intend to invest in digital assets.