According to new research by London-based Nickel Digital Asset Management (Nickel), Europe’s leading regulated and award-winning digital assets hedge fund manager founded by Bankers Trust, Goldman Sachs and JPMorgan alumni, professional investors in the UK are turning positive on crypto and digital assets after a series of high-profile shocks.
Its study with institutional investors and wealth managers in the UK who collectively manage around $372 billion in assetsshows 60% expect Bitcoin to reach its November 2021 peak of $69,000 within three years with 23% predicting the previous record high will be passed within five years. Just 3% ofinvestors questioned whether Bitcoin will ever reach theprevious all-time-high of $69,000 again.
Around 60% agree Bitcoin could still hit the long-predicted $100,000 valuation but only in the long-term. Around 61% of those who believe $100,000 is possible, think it could be achieved within three to five years, while 17% say it could be hit within five years or more.
That reflects the growing long-term optimism the study found. More than half (53%) plan to increase investment in crypto and digital assets over the next six months while on a five-year view 20% say the current investment opportunities in the sector are very attractive while 47% say they are quite attractive. However around 33% of investors questioned say the sector is unattractive on a five-year view.
The key reasons driving increased investment over the next six months are expectations of improved regulation in the sector and a recovery in valuations. Up to 73% believe robust regulation will boost investment by institutional investors and wealth managers in the sector.
However, they highlight a lack of clarity over which regulators have the authority to police the market as well as a belief that regulatory bodies around the world are waiting for the US to take the lead as potential obstacles to increased regulation. Around 77% questioned cited the belief that regulators are waiting for a lead from the US as the biggest obstacle to more robust regulation.
Optimism about the sector comes after a long decline in valuations and a series of high-profile shocks such as the collapse of FTX which have knocked confidence. Up to 57%questioned said their organisation had cut their investments in the sector over the last six months. None of the investors questioned said they had exited the digital assets sector.
Anatoly Crachilov, CEO and Founding Partner at Nickel Digital, said: “The fallout from the collapse of FTX has highlighted the need for regulatory change and professional investors are clearly convinced it will lead to increased investment in the sector.
“Price predictions are always a daunting task, but it is significant that our research shows just 3% questioningBitcoin’s future. It is great to see investor’s belief in the fundamentals of the sector has not changed due to the failure of a select few centralized entities. This is especially evident from investors’ long-term views which show the sector is here to stay and no longer on the fringe of the investment world.”