The study conducted by Coinbase shows that institutional investors have a good outlook on the future of cryptocurrencies. However, the assessment took place before what happened with FTX.
Investors have added more cryptocurrencies to their reserves.
Regulatory issues and volatility are still a concern.
Coinbase's survey came before FTX fell.
A survey recently conducted by Coinbase reflects that, for digital currency investors, this crypto winter may not be as cold as initially imagined by many.
This reading on the state of the crypto winter was recently revealed by Coinbase, as it comes from the results of its 2022 Digital Asset Outlook Survey. It is a study conducted in collaboration with Institutional Investor and which looked at the views of 140 institutional investors on current market sentiment and the outlook from now on.
A crypto winter "not as cold"
Among the first aspects evaluated by the survey were the long-term outlook and expectations for cryptocurrencies, where Coinbase found very positive readings among participants.
Regarding the long-term outlook, the survey states:
"We examined changes in digital asset allocations in the survey and found that 62% of investors currently invested in cryptocurrencies increased their stock over the past 12 months (versus 12% who decreased their allocations). This data implies that institutional investors have continued to take a long-term view of these assets even as prices have fallen."
Adding to the above is that at least 58% plan to increase their crypto funds further as we advance over the next three years, while 59% of participants employ or plan to use a buy-and-hold approach.
72% of participants hold the thesis that cryptocurrencies are here to stay, indicating greater acceptance and adoption of these assets today. As for price developments, it reads:
"When asked about their outlook for prices, 54% of investors said they expect cryptocurrency prices to be range bound, while 29% expect them to trend lower over the next 12 months. Still, the long-term price outlook remains positive, with 71% of investors saying they expect valuations to increase over time."
Other metrics of interest
Here 44% of the participants reported that they are documenting themselves with research and general knowledge, while 36% are already tracking market data, without leaving aside a small group that contemplates linking these technologies to improve their processes and infrastructure.
Concerning the stated reasons for investing in cryptocurrencies, the general trends point to improving the state of their funds and accessing opportunities that derive profits, the latter by allocating capital to innovative technologies with long-term appreciation potential. Here he highlighted that, unlike other studies, investors are not considering cryptocurrencies as a mechanism to protect themselves from inflation.
And about the aspects that worry investors about digital currencies, the following stand out:
There is still great uncertainty perceived around regulatory elements.
They also highlight the volatility seen in prices and possible market manipulation.
Everything was going well until FTX happened
The survey conducted by Coinbase contemplated a period between September 21 and October 27, so the opinions reflected came into place before the FTX crash occurred, which led to a new fall in the crypto market and generated strong inconveniences for companies and users with exposure to the exchange.
One of the most damaging effects beyond the fall in prices had to do with the domino effect derived from the collapse of FTX. Other allied companies have seen operational difficulties, even declaring bankruptcy due to the impossibility of honoring their financial commitments.
While the ecosystem crumbled by the doomed Terra ecosystem and the implementation of measures by the U.S. and many others to deal with inflationary problems in their respective economies, the recent FTX-related events for many represent an extension of the crypto winter beyond what was expected.