62% of institutional investors in the cryptocurrency market increased their allocation to digital currencies in the past 12 months. Only 12% of respondents reported that they have reduced their cryptocurrency allocation. This shows that there is still a lot of interest in Bitcoin (BTC) and other digital currencies despite the current market conditions. This is according to a recent survey of institutional investors conducted in 2022 by the institutional arm of cryptocurrency exchange Coinbase.
62% of investors increased their cryptocurrency allocation
In a recent report released by Coinbase, institutional investors show a big interest in the cryptocurrency market despite the most recent downtrend affecting digital currencies this year. It is worth considering that the survey conducted by the Institutional Investor Custom Research Lab, took into consideration the decision makers of US institutions. These investors currently manage $2.6 trillion in assets.
The results show that institutions increased their allocation during the cryptocurrency winter. For example, over the past 12 months, the allocation to virtual currencies has increased by 62% over the past twelve months, while 26% of investors said their allocation remained unchanged. 12% of investors reduced their allocation.
The report reads as follows:
“We looked at changes in digital asset allocations in the survey and found that 62% of investors currently investing in cryptocurrencies increased their allocations in the past 12 months (vs. 12% who decreased their allocations).”
When it comes to the next three years, Investor Custom Research Lab asked about the future of the cryptocurrency market and what they want to do in the next three years. 58% of investors said they will increase their allocation, while 36% said their investments in digital assets will remain the same as now. Meanwhile, only 6% of respondents said they should reduce their cryptocurrency allocation.
It is worth considering that since November 2021 to date, Bitcoin has fallen more than 75% from $69,000 to below $16,000. This shows that there has been a strong bear market which has pushed down the price of most digital currencies and affected the cryptocurrency market as a whole. Several companies have already imploded, and many more could be affected in the future.
Luna and FTX are just two of the more recent examples of what can happen to digital currency corporations and firms. However, the report released by Coinbase shows that sentiment towards digital assets has remained positive. 72% of respondents said that virtual currencies are here to stay.
According to data shared by CoinGecko, Bitcoin is now trading at $16,500 and has a market capitalization of $318 billion. Other virtual currencies such as Ethereum (ETH), Binance Coin (BNB), and XRP have also declined in recent years. Meanwhile, Ethereum is trading at nearly $1,200 per coin, followed by Binance Coin at $300 and XRP at $0.398. Investors are now trying to figure out if the cryptocurrency market has bottomed out or if it will continue to soar in the coming months.