Despite the fact that the prices of cryptocurrencies like Bitcoin and Ethereum are still at low levels compared to a year ago, institutional investors continue to increase or plan to expand their positions.
In light of this, a survey conducted between September 21 and October 27 by Institutional Investor Custom Research Lab found that 62% of institutional investors with crypto exposure increased their allocations in the past year and that 58% expect to do the same over the next three years, despite the tenacity of the market volatility throughout 2022.
According to those statistics, wealthy investors have adopted a long-term perspective on the rising asset class and are confident in its ability to upend the much bigger traditional financial services sector. In fact, 72% of those polled—140 institutional American investors with a combined $2.6T in assets under management—said they thought cryptocurrency was here to stay.
The recent collapse of cryptocurrency exchange FTX, as well as earlier widely-publicized failures of stablecoin USDT (Terra), Three Arrows Capital, Celsius and blockchain-based attacks, have undoubtedly harmed investor sentiment across the whole digital asset market. Additionally, the sector has had to deal with monetary tightening and economic instability on a global level.
83 per cent of investors responded that they expect crypto prices will trade range-bound or decline over the course of the upcoming year. Nevertheless, 71% of respondents believe that asset values will rise in the long run.
Even if the FTX collapse continues to have an impact on the whole crypto ecosystem, some industry insiders believe that over time, the market will continue to develop and expand, especially now that regulatory oversight is about to increase after the incident.
Given the overwhelming dominance of bearish sentiment, the industry participants are expecting that Bitcoin price levels would remain at this level and not fall much lower, like $12,000. JP Morgan had predicted that they could fall to $13,000 levels.
The head of technical strategy at independent stock research firm Fundstrat in New York, Mark Newton, forecasted that the price of bitcoin will most likely approach and test the $13,000 level before any support. He does not, however, rule out the possibility that the extreme volatility and the bearish attitude could even manage to bring it below the $10,000 threshold.
According to a recent Glassnode chart reading, the number of Bitcoin owners with holdings between 0.1 and 10 has emulated previous highs. A total of 4.07 million wallets that contain more than 0.1 bitcoins have been recorded, while 952,754 wallets that have more than 1 bitcoin but fewer than 10 have also been counted.