Institutional Traders Shun Crypto Despite Regulatory Tailwinds

JPMorgan's latest electronic trading survey of institutional traders has revealed a significant lack of interest in cryptocurrency trading among respondents. According to the survey, 71% of traders have no plans to trade cryptocurrency this year, a slight decrease from 78% in 2024. This indicates a persistent reluctance among institutional investors to engage with the crypto market.

The survey also found that 16% of respondents plan to trade cryptocurrency this year, and 13% said they are already trading. Both figures are higher than in 2024, suggesting a small but growing interest in the crypto market among institutional investors. However, the majority of traders still appear to be cautious about entering the crypto space.

The seeming lack of interest in crypto trading comes despite an improving regulatory environment for digital assets in the United States. Eddie Wen, JPMorgan's global head of digital markets, told Bloomberg that recent changes have lowered barriers for traditional banking community members to enter the crypto space. However, the survey results suggest that institutional traders are still hesitant to engage with cryptocurrencies.

Respondents to the survey also identified inflation and tariffs as the biggest impacts on markets in 2025, followed by escalating geopolitical tension. Market volatility was cited as the biggest trading challenge by 41% of those surveyed, up from 28% last year. This suggests that institutional traders are focused on more traditional market risks and challenges, rather than the potential opportunities presented by the crypto market.

The annual survey of 4,200 JPMorgan clients participating from 60 locations around the world ran from Jan. 9 to 23. The survey's findings highlight the ongoing cautiousness of institutional investors towards the crypto market, despite the improving regulatory environment and growing interest from retail investors.