In a survey of institutional traders conducted by JP Morgan, more than half of the respondents predicted that, over the next three years, machine learning and artificial intelligence will have a greater impact on trading than blockchain and distributed ledger technology.
The seventh edition of JP Morgan’s e-Trading Edit report was released in January and was based on a survey of 835 institutional traders across 60 worldwide marketplaces. The objective of the annual survey of trader sentiment, which covers a variety of asset classes, is to identify “upcoming trends and the most controversial topics.”
The turbulent cryptocurrency bear market, along with recent consumer and business enthusiasm over approachable AI technology like ChatGPT, appears to have changed the perspective of financial industry professionals. With 25% of respondents saying they were critical to the future, blockchain and distributed ledger technologies tied for second place with AI and machine learning last year. With 29 percent, mobile trading applications came in first.
Today, AI surpasses every other significant technology area, with a citation rate of 53% significantly exceeding that of the blockchain (12%) and API integration (14%) today. Mobile apps, along with quantum computing and natural language processing, dropped to 7% of the top technologies for 2022.
JP Morgan’s research on cryptocurrency in particular revealed that 72% of traders “had no plans to trade crypto or digital coins,” with 14% forecasting they will do so within the next five years.
However, it was evident from the responses that other players were positive on the market.
The survey says that participants expect that by 2024, 64 percent of their activity would be in the cryptocurrency arena. The report predicts that during the course of the coming year, electronic trading volumes will rise most rapidly in the areas of commodities, credit, and cryptocurrency and digital coins.
While traders agreed, according to the study, that electronic trading will continue to expand, they also predicted bad weather. Recession risk (30%), inflation (26%), and geopolitical war (19%) were the three most often cited prospective scenarios that will have the largest influence on the markets in 2023.
The JP Morgan research and reports on cryptocurrencies and digital assets have been released over the past month, with the e-Trading Edit study being only the most recent. The company foresaw “major problems” for Bitcoin and Ethereum last week and mentioned that Solana, Terra, and tokens were gaining popularity in the decentralized finance (DeFi) and non-fungible tokens industries (NFTs).
The planned Shanghai update for Ethereum “may herald in a new era of staking” for the company, according to JP Morgan, which also examined the prospects for prominent cryptocurrency exchange Coinbase last month.
