Crypto News

JPMorgan Survey Reveals Institutional Investors’ Cautious Stance on Crypto Trading Despite Evolving Regulations

February 6, 2025
Smart Money

Institutional Investors Express Caution Towards Crypto Trading, JPMorgan Survey Reveals

A recent survey conducted by JPMorgan has revealed a persistent wariness among institutional investors when it comes to engaging in cryptocurrency trading. The findings, drawn from an e-trading survey of institutional traders, show that more than 70% of respondents do not plan to trade in crypto this year.

Survey Insights

The JPMorgan survey, which polled 4,200 clients across 60 locations worldwide, indicates that 71% of institutional traders are steering clear of crypto and digital coins in 2025, a slight decrease from the 78% recorded in 2024. Only 16% of those surveyed expressed intentions to engage in crypto trading this year, while an additional 13% indicated they are already active in the space. Notably, both figures represent an uptick compared to previous findings in 2024, suggesting a gradual, albeit limited, increase in interest.

Focus on E-Trading

Despite the hesitant outlook on cryptocurrencies, the survey highlighted a contrasting trend regarding online trading as a whole. Every respondent stated plans to increase their online or e-trading activities, especially concerning less liquid assets. This shift indicates a move towards embracing digital trading methods within institutional frameworks, even as crypto remains a contentious area.

Eddie Wen, JPMorgan’s global head of digital markets, commented on the survey results, referencing an evolving regulatory environment. “Recent headlines suggest that the new administration supports the market, and recent changes have lowered the barriers for traditional banking community members to enter this space,” he stated, reflecting on the implications of recent regulatory developments in the United States.

Market Concerns

The survey also unveiled that inflation and tariffs are anticipated to have the most significant impact on markets in 2025, surpassing concerns related to crypto trading. Respondents indicated that escalating geopolitical tensions rank closely behind as a market influence. Furthermore, a noteworthy increase in concern was observed regarding market volatility, which was identified as the biggest trading challenge by 41% of participants, up from 28% in the previous year.

Gergana Thiel, global co-head of Macro Sales at JPMorgan, acknowledged this trend: “It does not surprise me that 51% of the participants thought that tariffs and inflation will be two of the central risks or two of the central spots for the market to focus on.”

Regulatory Environment Shifts

The lukewarm sentiment towards cryptocurrency trading comes amid a changing regulatory landscape for digital assets in the United States. Recent actions, including a strategic reduction in the U.S. Securities and Exchange Commission’s (SEC) crypto enforcement unit, have fueled speculation that the federal government may be warming up to the crypto industry.

Additionally, former President Donald Trump signed an executive order aimed at establishing a sovereign wealth fund, with management support from figures such as Treasury Secretary Scott Bessent and Secretary of Commerce Howard Lutnick, both known for their favorable views on crypto. Rumors have circulated that this fund could potentially be utilized for purchasing Bitcoin, hinting at a growing acceptance of digital currencies at the institutional level.

In the wake of these developments, White House “crypto czar” David Sacks has asserted the administration’s intention to bring stablecoins onshore, aiming to reinforce the dollar’s prominence in both international and online spheres.

As the year progresses, industry observers will be keen to see whether these evolving regulatory frameworks and market dynamics influence institutional investors’ relationship with cryptocurrencies and digital assets in general.