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U.S. investment managers have grown bullish about Bitcoin’s prospects despite recent events that have roiled digital-currency markets, research released Wednesday indicates.
Feeding the renewed optimism are prospects for “improved regulation” and expectations of a “recovery in valuations” for Bitcoin, according to the research, in which 30 major investment managers were queried in January by Nickel Digital Asset Management, a London-based hedge-fund manager. The 30 firms collectively manage more than $450 billion in assets.
Some 53% of the surveyed managers indicated they plan to boost investment in digital assets over the next six months, while fully 93% feel Bitcoin’s valuation will return to the $69,000 level—it’s all-time high—within five years. At the same time, none of the investors doubted Bitcoin’s prospects as a leading cryptocurrency. “It is significant that our research shows no investors are questioning Bitcoin’s future,” says Anatoly Crachilov, chief executive and founding partner at Nickel Digital, in a statement.
Bitcoin, along with other cryptocurrencies, tumbled last fall following the collapse in November of the major crypto exchange FTX and the ensuing financial scandal surrounding its founder, Sam Bankman-Fried. Charged with a dozen federal charges related to fraud, Bankman-Fried is awaiting trial in the United States following a not-guilty plea.
Bitcoin’s value plummeted to $15,000 in the wake of the FTX failure and stood at $26,439 as of early Wednesday, according to coinmarketcap.com. Only in April did the digital currency return to the better-than-$28,000 valuation it had last posted in June last year. It still ranks as by far the largest of the world’s cryptocurrencies by market capitalization, with a more than $500 billion total value for coins in circulation.
But the failure of FTX wasn’t the sole cause of Bitcoin’s headwinds. The collapse earlier this year of three major banks with ties to cryptocurrency—Silicon Valley Bank, Silvergate Capital Corp., and Signature Bank—also roiled the market for Bitcoin and other digital assets.
Still, investor sentiment regarding Bitcoin, at least, appears to be rapidly improving. Some 74% of the U.S. investors surveyed by Nickel Digital say investment opportunities in digital currencies are either “attractive” or “quite attractive.” The rising sentiment is founded on prospects for increased regulation and recovering valuations, according to the survey, though investors indicated they would like more clarity regarding which regulators “have the authority to police the market,” according to Nickel Digital’s report. Some also feel regulatory agencies in other countries are waiting for the United States to take the lead.
