October 1, 2022

Wall Street investors respond to a survey and most were lapidary about the future of bitcoin.

Almost a quarter of investors declared the asset class to be junk. Retail investors were more concerned with cryptocurrencies than their institutional counterparts and professional investors were more open-minded towards digital assets.

Forty percent saw it going the other way. Bitcoin fell 2.4% to $20,474 on Monday morning in New York. The token is more likely to drop to $10,000, cutting its value by about half, than to rise back to $30,000, according to 60% of the 950 investors who responded to the latest MLIV Pulse survey.

The lopsided prediction underscores just how bearish investors have become. The crypto industry has been rocked by troubled lenders, collapsing currencies, and the end of pandemic easy money policies that fueled a speculative frenzy in financial markets.

Some $2 trillion has disappeared from the market value of cryptocurrencies since the end of last year, according to data compiled by CoinGecko.

Almost a quarter of investors declared the asset class to be junk. Retail investors were more concerned with cryptocurrencies than their institutional counterparts and professional investors were more open-minded towards digital assets.

But overall, this sector remains polarizing: while around 20% said crypto is worthless, 28% of respondents overall expressed high confidence that crypto is the future of finance.

Bitcoin has already lost more than two-thirds of its value since hitting nearly $69,000 in November and hasn’t traded as low as $10,000 since September 2020.

said Jared Madfes, a partner at Tribe Capital, a venture capital firm that “It’s very easy to be scared right now, not just in crypto, but in the world in general.” He said expectations of a further drop in Bitcoin reflect “the inherent fear of people in the market.”

The collapse of cryptocurrencies is likely to put more pressure on governments to step up regulations of the industry.

Such supervision is seen as positive by the majority of respondents, as it could improve confidence and lead to greater acceptance among institutional and retail investors.

The government intervention is also likely to be welcomed by consumers burned by the collapse of the so-called TerraUSD stablecoin and troubled brokers like broker Voyager Digital Ltd and Celsius Network.

For use in digital payments, central banks are also considering developing their own digital currencies.

But neither the potential challenge from central banks and recent price declines are expected to significantly change the industry by dethroning the two dominant tokens, Ether and Bitcoin.

In 5 years the majority of respondents anticipate that one of those 2 will remain a driving force, even as a significant portion see central bank digital currencies taking on a key role. “Bitcoin is still driving much of the cryptoverse while Ethereum is losing its lead,” said Ed Moya, senior market analyst at Oanda Corp., a forex broker.

There was a broader consensus on one corner of the market: non-fungible tokens. NFTs became famous for attracting million-dollar valuations for pictures of monkeys during the height of the cryptocurrency boom. But the vast majority of respondents see them as just art projects or status symbols, with only 9% seeing them as an investment opportunity.

Furthermore, those on the hunt for the next asset price bubble may do well to look elsewhere, as speculative manias rarely hit the same asset class twice.

Ultimately, most respondents expect the next big thing to be completely unrelated to cryptocurrencies, as NFTs, the next generation of the internet known as web3, and other blockchain developments are seen as having little chance of triggering the next frenzy.

Matt Maley, chief market strategist at Miller Tabak + Co, said, “The next financial bubble is always something different than the last bubble, so the majority is absolutely right on this one.” Posted by Cryptobtcbrowser, news and information agency.

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