1 year ago
87 Bitcoin bulls should remain vigilant since Wall Street expects the crypto’s crash to get a lot worse. Some $2 trillion has already evaporated from the market value of crypto since late 2021, according to CoinGecko data.
On its part, Bitcoin is highly likely to plunge to $10,000, cutting its current value roughly in half, than it is to rally back to $30,000, based on 60% of the 950 investors who responded to the latest MLIV Pulse survey. 40% believe it will go the other way. The token is trading around $20,400 as of July 11, after ending the past week more than 12% higher.
The lopsided projection highlights how bearish the investors have become. In that context, the crypto sector has been rocked by collapsed currencies, troubled lenders, and an end to the easy money policies of the pandemic that underpinned a speculative frenzy in the financial markets.
Retail investors were quite apprehensive about cryptos more than their institutional counterparts, with nearly 25% declaring the asset class to be garbage. The professional investors were more open-minded toward digital assets.
But in general, the industry remains a polarizing one: while some 28% of the overall respondents expressed lots of confidence that cryptos are the future of finance, 20% said that they are worthless. Bitcoin has already lost over two-thirds of its value since it hit hits of about $69,000 in November 2021 and has not traded as low as $10,000 since September 2021.
Jared Madfes, a partner at Tribe Capital, a venture capital firm, stated:
“It’s very easy to be fearful right now, not only in crypto but generally in the world. The expectations for a further drop in Bitcoin reflect “people’s inherent fear in the market”.
The crypto crash might put more pressure on governments to step up regulations of the sector. Such supervision is seen as positive by most respondents since it could increase confidence and result in widespread acceptance among retail and institutional investors.
Government intervention will also likely be welcomed by consumers who were burned by the collapse of the infamous stablecoin TerraUSD and troubled middlemen like broker Voyager Digital Ltd and Celsius Network.
Central banks are also considering developing their digital currencies for use in digital payments. But neither the possible challenge from central banks nor the recent price drops are expected to considerably topple the sector by dethroning the two dominant tokens, Ether and Bitcoin.
Most of the respondents expect that one of those two will remain a major driving force in five years even while a considerable share sees central bank digital currencies taking on an integral role. Ed Moya, a senior market analyst at Oanda Corp., a foreign-exchange broker, commented:
“Bitcoin still is powering large parts of the cryptoverse, while Ethereum is losing its lead.”
There was a widespread consensus about one segment of the market: nonfungible tokens (NFTs). NFTs became famous for attraction valuations in the millions of dollars for pictures of bored monkeys during the height of the crypto boom. But the overwhelming majority of the people surveyed consider them to be just art projects and status symbols, with about 9% seeing them as an investment opportunity.
Furthermore, those who are looking for the next asset-price bubble might do well to look in other places, since speculative manias rarely strike the same asset class twice.
Eventually, the next big run-up is expected by a majority of the respondents to be wholly unrelated to cryptos, with NFTs, the next generation of the internet called web3, and other blockchain developments seen as having low chances of setting off the next possible frenzy.
Matt Maley, the chief market strategist at Miller Tabak + Co., stated:
“The next financial bubble is always something different than the last bubble, so the majority is right on this one.”
