A report published by Nickel Digital Asset Management, a London-based hedge-fund manager indicates that an overwhelming majority of institutional investors are optimistic about bitcoin’s future.
Published in April 2023, the report involved 200 institutional investors and wealth managers from seven different countries.
The bitcoin industry has faced a series of significant setbacks recently. Once boasting a market capitalization of around $1.2 trillion and record-breaking prices for bitcoin, the market has experienced a significant contraction.
While the collapse of the Terra/Luna ecosystem may seem relatively insignificant compared to the bankruptcy of the FTX crypto exchange, both incidents have contributed to the industry’s challenges.
John Ray III, the executive appointed to guide FTX out of bankruptcy, expressed astonishment at the “complete failure of corporate controls and the absence of trustworthy financial information” observed in the case.
The study encompassed various market-related topics, including the participants’ perspectives on the future trajectory of Bitcoin, regulatory aspects, the overall market outlook, and institutional investors’ investment strategies concerning digital assets.
One noteworthy finding from the research is the investors’ unwavering confidence in Bitcoin’s potential to reach its previous all-time high of $69,000.
An overwhelming majority, nearly 87%, anticipated that bitcoin’s price would surpass the $17,000 mark by the end of 2022, based on the survey conducted. Among these investors, nearly 23% go a step further, forecasting that bitcoin will exceed $30,000 by the conclusion of 2023. The study also reveals a notable level of assurance regarding bitcoin’s long-term price trajectory.
Investors are expressing strong confidence in the future prospects of bitcoin, with 97% of respondents saying that they are certain bitcoin will surpass its previous all-time high of $69,000, achieved in November 2021.
A significant majority, approximately 76%, anticipate that bitcoin will reclaim its previous peak within five years. Furthermore, 39% of investors predict that the record high will be surpassed within a shorter timeframe of three years. These findings underscore the prevailing optimism surrounding bitcoin’s potential for future growth.
According to the report, 66% of institutional investors intend to either increase their existing investments or initiate new investments in bitcoin and digital assets within the next six months.
Notably, 12% of respondents anticipate a substantial surge in their organization’s investment allocation, while 3% plan to venture into this domain for the first time. These findings highlight a positive outlook among institutional investors regarding the potential of bitcoin as a trusted investment vehicle.
When considering a five-year perspective, institutional investors’ outlook on the digital asset sector becomes even more positive. Among them, 38% find the current investment opportunities in the sector to be highly attractive, while 46% consider them quite attractive. Merely 17% express a view of the sector as unattractive over the next five years.
Increased investment in the sector is primarily driven by two key factors: the anticipation of improved regulation and a rebound in valuations. Around 64% of institutional investors expect significant enhancements in the regulatory environment, while 63% predict a recovery in pricing.
Moreover, there are indications of broader support for the sector, as 57% of institutional investors state that their organizations’ appetite for alternative assets is growing. Additionally, 43% believe that valuations are appealing when considering a medium to long-term perspective.
These findings demonstrate a positive sentiment and growing interest among institutional investors towards the digital asset sector, while confidence rises in investment opportunities within the bitcoin sector, both in the short and long term, despite the recent market downturn.
