Crypto-enthusiasts are warned that things may get a lot worse before they start getting better. This is especially true for the world’s most important cryptocurrency.
Wall Street is currently expecting the crypto winter to grow colder with a majority of investors believing that Bitcoin is more likely to continue to fall to $10,000 than it is to rally back to levels around $30,000, effectively meaning that the token will lose roughly half of its current value.
These insights have been gleaned from the latest MLIV Pulse survey conducted on 950 investors and reported on by Bloomberg. According to the survey, 60% of investors believe that Bitcoin is more likely to continue to lose its value and tumble to $10,000 than to climb towards $30,000 again.
Forty percent of investors surveyed, however, are more optimistic, believing that it could go the other way. As of Monday afternoon, Bitcoin was valued at $20,565.80, according to Coindesk.com.
The 60/40 split in the survey shows just how conservative crypto-investors have become. The cryptocurrency industry has for a few months now been steadily in the midst of a collapse.
Troubled lenders, dead and dying tokens and an end to the virtual currency frenzy that gripped the world during the COVID-19 pandemic (brought about by renewed money restrictions worldwide) have hammered virtual coin enthusiasm into the dust.
According to data compiled by CoinGecko, some $2-trillion has vanished from the market value of cryptocurrencies since late last year. In August 2021, Bitcoin fans celebrated that their favoured token had surged to $50,000 in a three-month high. In November 2021 the cryptocurrency hit nearly $69,000 to thunderous applause and has since lost more than two-thirds of its value, again showing just how unstable faux money can be.
The sector, overall, remains polarising, according to the MLIV survey. 28% of overall respondents still expressed a “strong confidence” that crypto is the future of finance, another 20% said the industry was “worthless.”
“It’s very easy to be fearful right now, not only in crypto but generally in the world,” said Jared Madfes, partner at VC firm Tribe Capital, quoted by Bloomberg.
He continued that the current expectation of a further drop in Bitcoin reflects “people’s inherent fear in the market.”
Bitcoin, however, continues to reign as king of crypto with Ethereum coveting the throne in close proximity. “Bitcoin still is powering large parts of the cryptoverse, while Ethereum is losing its lead,” said Ed Moya, senior market analyst at Oanda Corp, a foreign-exchange broker.
Further Regulations Could Be a Good Thing
Bloomberg writes that the crypto crash will probably pressure worldwide governments into implementing more regulations on the virtual currency industry.
A majority of survey respondents indicated that such supervision is seen as a positive and could lead to improved confidence and a wider range of acceptance amongst institutional and retail investors.
NFTs Have Lost Their Stuff
Despite the polarising survey response on Bitcoin, investors have seemingly agreed that NFTs (non-fungible tokens) are no longer worth any real investment.
NFTs, digital images of anything from the artwork of monkeys to screenshots of Tweets, became famous, or infamous depending on who you ask, for attracting valuations in the millions of dollars during the height of last year’s crypto boom.
Now, according to an overwhelming majority of investors, NFTs are considered more “art projects” or “status symbols” with only 9% of survey respondents seeing them as actual investment opportunities.
Speculative investors are advised to look elsewhere from things like NFTs and cryptocurrency for the next frenzy.
“The next financial bubble is always something different than the last bubble, so the majority is absolutely right on this one,” said Matt Maley, chief market strategist at Miller Tabak + Co.
By Luis Monzon
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