A recent study by MLIV Pulse showed that 60% of Wall Street investors surveyed believe that bitcoin dropping to $10,000 is a more likely scenario than a rise to $30,000 for the asset. The survey further speculates that professional investors are more supportive of the cryptocurrency industry than retail investors.
The Secret of Pessimism Among Wall Street Investors
The latest drop in the cryptocurrency market and negative events around the region have reversed the overall sentiment. Bitcoin, for one, has been underperforming since the beginning of the year and is far from its peak in 2021. In fact, late last month, the primary digital asset closed in on its worst quarter in a decade.
Considering this downtrend, it’s no surprise that 60% of Wall Street’s 950 investors believe that the price of bitcoin is better off falling to $10K than rising to $30K. Chances are.
The survey revealed that cryptocurrencies are a highly polarizing topic among participants. 28% said that digital assets are the future of finance, while every fifth of the respondents said they are worthless.
The general distrust of the asset class also comes from the fact that the world is facing many challenges nowadays like high inflation, energy crisis and military conflict. Speaking on the matter, Jared Madface – Partner at Tribe Capital was:
“Not only in crypto, but in the world in general, it is very easy to be intimidated right now.”
Despite the bearish predictions for bitcoin, the majority of Wall Street investors believe it will continue to be the most powerful asset in its sector. In contrast, the second largest by market capitalization – Ethereum – is “losing its edge.”
Touching on non-fungible tokens (NFTs), most participants simply labeled them as art projects or status symbols. Only 9% think digital collectibles can serve as a suitable investment opportunity.
Subsequently, Matt Malee, chief market strategist at Miller Tabak + Company, argued that the rise of crypto last year was an example of a financial bubble. In his view, the next such event will focus on something different as the speculative frenzy rarely strikes the same place twice.
What could have pushed investors back?
It is safe to assume that the crypto market collapse and panic among investors was driven by the many collapsed projects and troubled ventures in the industry.
Terra’s example is one of the most famous. In May, the protocol’s algorithmic stablecoin – UST – lost its peg and fell below the $1 target. Shortly after, native token LUNA also went into a freefall, resulting in terrible losses for investors, while some opportunists discovered the algorithmic nature of UST to sell LUNA and profit by arbitrage.
In June, DeFi platform – Celsius – halted withdrawals, swaps and transfers between accounts, citing “extreme market conditions”. Earlier this month, the company laid off 150 employees, which is roughly a quarter of its total workforce.
BlockFi was another beleaguered entity that faced several issues. Last month, it laid off 20% of its workforce, while a few days later, the state of Iowa ordered it to pay an administrative fine of nearly $1 million for failing to register as a securities trading platform.
Amid the agony, digital asset exchange – FTX – and crypto lender – Layden – revealed their intention to acquire BlockFi. as cryptopotato As reported last week, the Sam Bankman-Fried-led organization is very close to signing the deal.
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