2024

Artificial Intelligence

Bitcoin ETF

New data shows that most global institutional traders have no interest in exposing holdings to digital assets although the number of pro-crypto firms has recorded a slight growth. 
A recent <a href="https://www.jpmorgan.com/markets/etrading-trends">JP Morgan 2024 survey</a> from over 4000 financial market participants shows creeping acceptance of Bitcoin and other cryptocurrencies by institutional traders. 
According to participants, 78% of these traders have no plans to trade digital assets soon, recording an increase from 2023’s numbers. 
Last year, 72% of trades noted that they would not add crypto assets to their portfolios, with several analysts pointing to the lack of uniform regulations in the market as a possible reason for pushing out investors. 
Only 9% of firms responded positively to the fact that they trade digital assets, a slight 1% increase from last year when investors faced the <a href="https://cryptonews.com/news/crypto-prices-crash-as-ftx-crypto-exchange-collapses-what-we-know-so-far.htm">FTX saga</a>. 
For prospects, none of the firms not currently trading virtual assets plan on opening that division in the next five years despite 14% responding positively last year. 
2023 survey results also show that 6% of participants say they will start trading digital assets in the next 12 months. This year, 12% showed interest in resuming trading digital assets. 
Although figures from the survey show a sharp stance against the crypto market, the positives can be seen in the 12% of the 4,000 traders who want to <a href="https://cryptonews.com/news/institutional-investors-flock-to-bitcoin-pushing-inflows-past-1-billion-in-2023.htm">gain exposure to the market</a> on the back of recent developments. 
Furthermore, participants in the JP Morgan survey were asked about the next big technology in trading, and many firms pointed to Artificial Intelligence (AI) ahead of distributed ledger technology (DLT). While 61% voted for AI, only 7% backed <a href="https://cryptonews.com/guides/what-is-blockchain.htm">blockchain technology</a>. 
<h2 id="scams-and-uncertainty-harm-the-market">Scams and Uncertainty Harm The Market</h2> 
 Analysts have lamented reoccurring digital asset scams in the past two years as a hurdle on the road to mass adoption. 
<a href="https://twitter.com/hashtag/PeckShieldAlert?src=hash&amp;ref_src=twsrc%5Etfw">#PeckShieldAlert</a> 2023 saw 600+ major hacks in the crypto space, resulting in ~$2.61B in losses, with $674.9M recovered. $1.51B lost to hacks (excluding <a href="https://twitter.com/hashtag/Multichain?src=hash&amp;ref_src=twsrc%5Etfw">#Multichain</a> unauthorized withdrawals) &amp; $1.1B to scams. This marks a 27.78% decrease from 2022. <a href="https://twitter.com/hashtag/DeFi?src=hash&amp;ref_src=twsrc%5Etfw">#DeFi</a> protocols remained prime… <a href="https://t.co/G7PIU3WyrX">pic.twitter.com/G7PIU3WyrX</a> 
— PeckShieldAlert (@PeckShieldAlert) <a href="https://twitter.com/PeckShieldAlert/status/1751788344281886726?ref_src=twsrc%5Etfw">January 29, 2024</a> 
Frequent hacks costing investors millions are among the reasons why institutional traders and traditional market players stay off the crypto market. Last year, the wider market lost $2 billion to cryptocurrency bad actors opening up further debates on the safety of user assets. 
In 2022, the <a href="https://cryptonews.com/news/terrausd-stablecoin-scandal-sec-sues-terraform-labs-do-kwon-for-deceiving-investors-heres-what-happened.htm">collapse of the Terra Network</a> and the subsequent implosion of FTX wiped millions off the market while attracting bottleneck regulations to the sectors. 
In the United States, regulators have filed multiple <a href="https://cryptonews.com/news/sec-sues-binance-cz-over-blantant-disregard-of-its-rules.htm">lawsuits against cryptocurrency firms</a> without specific rules in place. This has led some firms to hint at a possible move to other jurisdictions. 
All these market conditions have resulted in reduced investment from traditional finance players. However, recent activities like the approval of a spot Bitcoin ETF have been tipped to change the tide. 
Following the United States Securities and Exchange Commission (SEC) <a href="https://cryptonews.com/exclusives/us-spot-bitcoin-etf-approved-uk-unlikely-to-follow-suit.htm">approval of Bitcoin ETFs</a>, there has been an inflow of funds in the market as many traditional investors have a new window of investment.

78% of Institutional Traders Have No Interest In Crypto: JP Morgan

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