Big investors have lowered their bullish valuation forecasts for Bitcoin after a series of sharp falls in value, with average year-end price expectation more than 20% lower than February.
A Procensus poll polled 137 investors who manage more than $ 17 trillion, put their average price expectation for Bitcoin at the end of the year at $ 47,000. This is a decrease from $ 60,000 when investors were last surveyed four months ago, a period that coincided with a steep rise in prices and the cryptocurrency market cap topped $ 1 trillion.
However, the price of Bitcoin has fallen from its record high of more than $ 63,000 in April to around $ 33,000, with Chinese trade and mining authorities partly responsible for the decline.
The price was also influenced by a series of tweets from Tesla CEO Elon Musk. Bitcoin lost more than 40% of its value last month after Musk said the electric car company would no longer accept the cryptocurrency for purchases – just three months after it was announced.
The U-turn, triggered by environmental concerns related to Bitcoin mining, caused the price of the digital currency to drop more than 10%.
Tesla bought $ 1.5 billion in Bitcoin earlier this year, though it sold around $ 272 million later in the first quarter. The automaker said the fair market value of its holdings had reached $ 2.48 billion by the end of March, which represents potential Stroke of luck of $ 1 billion.
Retail investors were largely responsible for the Bitcoin price boom, with institutional investors being cautious about venturing into the cryptocurrency, citing huge fluctuations in price as one of the main reasons for keeping it out of portfolios.
Institutional investors appear to be warming to cryptocurrencies, however, with 43% of Procensus survey respondents saying they have a place in an institutional portfolio either as a store of value or as an inflation hedge, up 9 percentage points from February.
A third of surveyed investors said they bought stocks to get involved in the cryptocurrency industry or tokenization – an increase of 7 percentage points since the last survey.
A hedge fund participant in the Procensus survey said: “A certain allocation to the asset class makes sense for any portfolio, the question is the size.”
Exchange traded product providers are among those looking to capitalize on rising institutional demand for cryptocurrencies.
The Swiss issuer 21Shares announced on June 7th that it would launches its Bitcoin ETP at the Aquis Exchange in London and Paris this summer, while the ETC Group launched its first bitcoin ETP in the UK this month, also on Aquis.
21Shares and Aquis said they plan to make more cryptocurrency-exposed ETPs available to investors, including for tokens like Ether, Ripple, Polkadot and Cardano.
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