A recent electronic trading survey by J.P. Morgan reveals that a significant majority of institutional traders are still hesitant to engage with cryptocurrency markets. The study, which included over 4,200 institutional traders, indicates that 71% of respondents have no plans to trade cryptocurrencies or digital assets in 2025. Although this marks a decrease from the 78% recorded in 2024, it underscores the prevailing cautious sentiment among traditional finance participants.
Growing Interest Amid Persistent Caution
While most institutional traders remain on the sidelines, there are signs of gradually increasing interest in digital assets. Sixteen percent of those surveyed plan to begin trading cryptocurrencies in 2025, while 13% are already active in the market. Both figures show a moderate uptick compared to the previous year. The proportion of traders currently involved in crypto trading increased by 4% year-over-year, though growth remains slower than many industry observers had anticipated.
This slow pace of adoption highlights the ongoing wariness among institutions, many of which continue to view cryptocurrencies as a highly volatile and speculative asset class. Regulatory uncertainty and operational risks are often cited as key barriers to entry.
Inflation Tops List of Trader Concerns
The survey also shed light on the primary risk factors worrying institutional traders. All participants reported plans to increase their electronic trading activities, especially in less liquid asset classes. However, market volatility remains a major challenge, with 41% of respondents identifying it as their biggest obstacle—a significant jump from 28% in 2024.
Gergana Thiel, Co-Head of Global Macro Sales at J.P. Morgan, noted that market uncertainties are intensifying. Fifty-one percent of those surveyed believe inflation and tariff policies will be the most critical risk factors in 2025, far surpassing geopolitical tensions, which came in second at 18%.
Policy Shifts Could Influence Future Participation
Recent developments in U.S. digital asset regulation may eventually encourage greater institutional involvement. Regulatory agencies have shown a more accommodating stance—for instance, the Securities and Exchange Commission (SEC) has reduced the size of its crypto enforcement unit, signaling a potential easing of oversight pressure.
Eddie Wen, Global Head of Digital Markets at J.P. Morgan, mentioned in an interview with Bloomberg:
"Recent policy changes have lowered the barriers for traditional financial institutions to enter the crypto market. The new administration’s stance appears more supportive of industry development."
Furthermore, the establishment of a sovereign wealth fund under executive order, managed by known crypto advocates Scott Bessent and Howard Lutnick, has led to speculation that the fund may allocate a portion of its holdings to Bitcoin. 👉 Explore institutional investment strategies
Whether these policy adjustments will translate into increased institutional crypto adoption remains to be seen, but the trend toward regulatory clarity is viewed as a positive step.
Frequently Asked Questions
Why are institutional traders cautious about cryptocurrencies?
Institutional traders often cite high volatility, regulatory uncertainty, and custody challenges as key reasons for their hesitation. Many are waiting for clearer regulations and more robust market infrastructure before committing significant capital.
What could change their attitude toward crypto investments?
Improved regulatory frameworks, the introduction of Bitcoin ETFs, and clearer tax guidelines could make institutional investors more comfortable. Additionally, demonstrated market stability and higher liquidity may attract larger participants.
How does inflation influence trading decisions?
Inflation erodes the value of fiat currencies, leading some investors to consider alternative stores of value like Bitcoin. However, institutions often prioritize hedging strategies involving traditional inflation-resistant assets before turning to cryptocurrencies.
Are institutional traders completely avoiding digital assets?
Not entirely. While a majority remain cautious, a growing minority are either already trading or planning to enter the market. Family offices and hedge funds have been among the earliest institutional adopters.
What role does electronic trading play in crypto adoption?
Electronic trading platforms are making it easier for institutions to execute large orders with better transparency and efficiency. As crypto markets become more integrated with traditional electronic networks, participation may increase.
Will policy changes really make a difference?
Policy shifts can reduce legal and operational risks, making it easier for institutions to comply with regulations. A supportive political environment could accelerate the development of financial products that bridge traditional and digital asset markets.