According to Bloomberg News, it is anticipated that the crypto crash is being reckoned to be more than expected.
It is predicted that digital currency will drop to $10,000, shedding its value by almost half. It was supposed to rally back to about $30,000 per 60% of the 950 investors that were respondents to the MLIV Pulse Survey. Around 40% have witnessed it going the other way. On late Friday afternoon, the figure was about $21,850, thereby ending the week at 12%.
Big Plunge
Investors believe that Bitcoin, the largest digital currency, is heading downward. The prediction underscores the bearish nature of the investors. Collapsed currencies, lender troubles and a stop in easy money policies related to the pandemic have triggered speculations throughout the market.
Approximately $2 trillion was siphoned off in the market value of the digital currencies towards the end of last year, and the same has been revealed as per data compiled by CoinGecko.
There was a lot of apprehension among the retail investors related to cryptocurrencies compared to their institutional counterparts. A quarter of these individuals had declared that these asset classes were just garbage. However, it was seen that the professional investors were open-minded as far as these digital assets were concerned.
Bloomberg News also reports that overall, the cryptocurrency sector has continued to be a polarizing one. In contrast, around 28% of the total respondents expressed confidence that digital currencies are financing’s future, and around 20% believe that they are useless and have no worth.
Anxious about Crypto
Bitcoin, the largest digital currency, has already lost more than 2/3rds of its value since hitting approximately $69,000 in November. Since then, it has not been trading as low as $10,000 since September 2020.
The crash in the cryptocurrency industry will further pressure the governments as they will be compelled to work out ways to regulate the industry and take necessary measures. But this step is seen as a positive step by most of the respondents. Such steps by the government will also ensure that it instills confidence among the investors, whether it is retail or institutional.
The central banks are also planning to develop digital tokens for making digital payments.
However, neither the price drop that has taken the place of late nor the central banks’ potential challenges are anticipated to increase this sector by dethroning Bitcoin and Ether, the two tokens dominating the crypto scene these days.
But most respondents think that either Ether or Bitcoin will become the driving force in the next five years, although few think digital currencies of central banks will play a more significant role.
