Crypto more attractive as SEC gets aggressive, say investors

Nearly 60% of 564 respondents to the latest MLIV Pulse survey indicated that they viewed the recent spate of legal action in crypto as a positive sign for the asset class, whose trademark volatility has endured in recent months. Major interventions include a US regulatory investigation into bankrupt crypto firms Three Arrows Capital and Celsius Network, as well as an SEC investigation into Yug Labs, the creator of a bored app collection of unregistered tokens or NFTs.

“I’m in the ‘yes’ camp. As a professional investor, you need a regulated investment opportunity and it opens doors for more professional investors to get into crypto, if it’s more regulated,” TIAA Chris Gaffney, president of world markets at the bank, said. “The more they can get crypto out of the Wild West and into traditional investments, the better.”

The sentiment extends to bitcoin. Most investors were a little more optimistic about crypto when asked in July. Nearly half of respondents expect the world’s largest cryptocurrency by market cap to continue trading between $17,600 and $25,000 by the end of this year – a departure from this summer’s sour outlook, when most said it was likely to climb earlier. A fall to $10,000 was more likely in comparison. $30,000. To be fair, this time respondents had a wider menu of options than those available in the previous survey.

In a Bloomberg TV interview, Marie-Katherine Leder, COO of Uniswap Labs, said, “Our investors and markets recognized that decentralized protocols have unique advantages that could benefit not only crypto markets, but traditional markets more broadly as well. ”

Although bitcoin is down nearly 60% this year, its price has been stuck between $18,171 and $25,203 since the last survey, unable to break out of that band meaningfully. Volatility has also subsided significantly, with the T3 Bitcoin Volatility Index down 33% as the coin reached its all-time high of nearly $69,000 on November 10th.

Bitcoin has held a strong correlation to risk aversion to the S&P 500 as well as the S&P 500 since March, barely changing its position over the past three months as investors have held the crypto with the same brush as investors. in an environment of rising interest rates. About 42% of respondents said they think crypto’s relationship with tech stocks will remain the same over the next 12 months, while only 43% said they would increase their exposure to digital assets over the same period.

It has been a story of two halves for crypto in 2022, with the first half of this year being dominated by chaos. Like Voyager Digital Ltd. went bankrupt, and $40 billion of the Terra blockchain ecosystem was wiped out. The overall value of roughly $2 trillion was erased from the industry’s end-to-end 2021 records. In June, as the broader macroeconomic environment soured and traders turned to more traditional assets like bonds and FX for profit, things began to change with crypto beginning to plateau at its current range-bound levels. .

“There is potential for indecision,” said Katie Stockton, managing partner at Fairlead Strategies.

In September, the Ethereum network completed a major network upgrade known as a merge, which by one estimate will reduce the energy consumption of the blockchain by about 99%. Still, only a third of investors said they believed that the so-called flipping, where the market cap of ether eclipses that of bitcoin, could happen in the next two years – a number that remained largely stable since July. Is.

Survey respondents also displayed a very broad church of opinion on crypto, which signifies that despite the sector’s relative notoriety among traders, it is still a divisive topic. When asked to choose a word that would describe the space, the two most popular answers were split almost equally between “Ponzi” and “future”.

“It’s almost like a religion – if you believe, you will always believe in value or adversity,” said Victoria Greene of G Square Private Wealth.

“The dichotomy between boom and bust perfectly describes crypto and the vast range of possible consequences. There are many unknowns, including regulation and platforms, as well as exactly what it is and what it will be used for,” she said. “So, if you’re a true believer, you say this is the future.” Those with a more traditional view might say it’s a Ponzi, she said.

This story has been published without modification in text from a wire agency feed.