Survey: Asset Managers See A Big Correction In The Crypto Market Coming In 2022
The crypto market has recently shown investors its extreme volatility after a mega bull market since the beginning of this year. Now some asset managers believe that the crypto market will be ripe for a massive sell-off in 2022.
According to the survey conducted by Natixis Investment Managers, digital assets are currently the top contenders for a major correction in 2022. Almost three-quarters of the institutions surveyed said cryptocurrencies were not a viable investment option for retail investors. The total assets under management by respondents totaled $ 12.3 trillion.
The survey was conducted in October and November by CoreData Research on behalf of Natixis. 500 institutional investors from several countries were surveyed. This includes 20 sovereign wealth funds and more than 150 company pension providers.
According to the survey, 40% of institutional investors see digital assets as a legitimate investment option. At the same time, however, they believe that they need to be regulated by the central bank.
The crypto market has seen a huge boom this year and now, by the end of 2021, has reached a market capitalization of more than $ 1.5 trillion. However, the crypto market has been even more volatile than usual over the past two weeks, with some of the well-known cryptocurrencies testing their support levels. In total, the crypto market lost more than $ 500 billion. Bitcoin (BTC) and other cryptocurrencies fell values between 10% and 30% percent.
Institutional investors have largely gained confidence
It is interesting that institutional actors have entered the crypto sector in large numbers. Of the institutes surveyed by Natixis, 28 percent have already invested in cryptocurrencies. In addition, a third of them said they wanted to increase crypto exposure in the next year.
In 2021, several traditional financial institutions started getting involved in cryptocurrencies. These include some of the big fund managers as well as pension funds. In addition, other well-known investors in the relevant circles have also bought into cryptocurrency. Many believe that cryptocurrencies like Bitcoin are a good hedge against inflation in this stimulus-heavy environment.
It may be, but it should be remembered that the crypto market has so far largely followed movements in global equity markets, and it has been with this latest correction.
In an interview with CNBC David Solomon, said CEO of Goldman Sachs, that you can not expect the same returns on equities in the coming years should :
“We don’t think we will get the same returns on stocks and many other assets over the next few years as we have seen in recent years. I’ve served on a number of investment committees and charitable foundations, college boards etc, and I’m sure the returns we’ve made over the past three to five years are different from what we should expect in the future. “
So there is a certain likelihood that the cryptocurrency market will move sideways for a longer period of time, as we did between 2018 and 2020.