About $2 trillion has disappeared from the market value of cryptocurrencies since late last year, according to data compiled by CoinGecko.
The token is more likely to fall to $10,000, cutting its value by about half, than to come back to $30,000, according to 60% of the 950 investors who responded to the latest MLIV Pulse survey. 40% predict the opposite will happen. Bitcoin fell 2.8% to $20,390 on Monday morning in London.
The forecast trend underscores how pessimistic investors have become. The crypto industry has been rocked by troubled lenders, collapsing currencies, and the end of easy money policies during the pandemic that fueled a speculative frenzy in financial markets.
About $2 trillion has disappeared from the market value of cryptocurrencies since late last year, according to data compiled by CoinGecko.
Retail investors were more concerned about cryptocurrencies than their institutional counterparts, with nearly a quarter saying the asset class is “junk”. Professional investors were more open-minded towards digital assets.
But overall, the sector continues to be polarizing: while some 28% of all respondents expressed strong confidence that cryptocurrencies are the future of the economy, 20% said they are worthless.
Bitcoin has already lost more than two-thirds of its value since reaching nearly $69,000 in November and has yet to touch $10,000 as of September 2020.
“It’s very easy to be scared right now, not just in cryptocurrencies but in the world in general,” said Jared Madfes, a partner at Tribe Capital, a venture capital firm. He said expectations of further Bitcoin declines reflect “the inherent fear of people in the market.”
The cryptocurrency crash is likely to put further pressure on governments to tighten regulation of the industry. Such oversight is seen as positive by the majority of respondents, as it could improve confidence and lead to wider acceptance by institutional and retail investors.
Government intervention will also likely be welcomed by consumers who were …chafed by the collapse of the so-called stablecoin TerraUSD and troubled intermediaries such as Celsius Network and Voyager Digital Ltd.
Central banks are also considering developing their own digital currencies for use in digital payments.
But neither the recent price declines nor the potential challenge from central banks are expected to significantly disrupt the industry by dethroning the two dominant tokens, Bitcoin and Ether. The majority of respondents expect one of these two to remain a driving force in five years’ time, although a significant proportion see central bank digital currencies taking on a key role.
“Bitcoin is still powering large segments of the crypto market, while Ethereum is losing its lead,” said Ed Moya, senior market analyst at Oanda Corp.
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