With the bear market in full swing, 62% of cryptocurrency investors have added to their portfolios in the past year. At least that’s what a Coinbase-sponsored study revealed.
Despite the disastrous consequences of the collapse of Terraform Labs, Three Arrows Capital, Voyager Digital, and most recently FTXInstitutional investors believe strongly in the potential of cryptocurrency. According to a Coinbase survey, only 12% of cryptocurrency investors have reduced their holdings since the start of the bear market.
Bear Market: An Opportunity for Institutional Investors
The survey covers 140 US-based investment institutions with a total of $2.6 trillion in assets under management. The majority of investors surveyed said they had increased their holdings during the course of the survey encryption winter. Likewise, many of them are taking advantage of the current situation to make long-term investments.
The survey reveals that the main reason why organizations want invest In crypto it is the profitability of digital assets. However, some of them also want to be on the cutting edge of new blockchain and cryptographic technologies.
According to the survey, 58% of institutional investors plan to increase their investment in the next three years. Most of them (59%) adopt or intend to adopt investment strategy at the long term.
As of this writing, the crypto market has a market capitalization of just under $860 billion ((for more than $2,000 billion in 2021). The decrease is explained by the lower price bitcoinwhich is currently hovering around $16,500, but also through other macro factors.
However, the report notes that the high volatility of the cryptocurrency market is seen as an opportunity by institutional investors looking to generate additional profits.
Cathy Wood, CEO of Ark Invest, predicts that the Bitcoin price will reach $1 million by 2030. In a new interview with Bloomberg, the American businesswoman announce “Bitcoin will do well in the end, but it will take time. Institutions will probably back off, but once they do their research and see what happened here, I think they can easily look at Bitcoin and Ether as a stepping stone.”
According to the latest CoinShares weekly report, sentiment in the cryptocurrency market is “extremely negative.” In fact, the analytics platform reported $44 million in inflows for the week, but the majority of those inflows came from short-term investment products.
However, the Coinbase survey showed that 72% of respondents remain optimistic about the future of the cryptocurrency market. 86% of them have already invested in cryptocurrency, while 64% are considering doing so. However, institutional investors still believe that regulatory compliance will be a major driver of market growth.
Regulations: The main driver of crypto market growth
According to the Official Monetary and Financial Institutions Forum, an independent think tank for economic and investment policies, regulation should also play a crucial role in the future of cryptocurrency.
Starling Bank, a large digital bank based in the United Kingdom, has recently tightened its grip on cryptocurrency transfers and All payments suspended Incoming and outgoing cryptocurrency exchange. Without a doubt, decisions like this will have a huge impact on the future of the cryptocurrency market.
Sheila Beer, policy advisor and former director of the Federal Deposit Insurance Corporation, announce to the Financial Times that lawmakers should develop a regulatory framework for the sector. Create a regulatory framework, publicly announce it and enforce it by changing the rules. Keep going because more and more people are getting hurt.”
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