2021 did see the crypto demand skyrocket, largely backed by increased institutional interest. Natixis Investment found in its latest survey that 28% of institutions have increased exposure to cryptocurrencies as we move towards 2022.
However, according to Bloomberg, the survey also maps the crypto sector as a “top contender” for a “major correction” in 2022, as around three-quarters of the institutions polled do not consider cryptocurrencies as an appropriate investment for most retail investors.
This is contrary to the fact that an estimated 8% of all surveyed institutions plan to dive into the sector next year. Recently, Visa amped up its crypto services by introducing a global crypto advisory unit. Speaking about the same, Head of Crypto at Visa, Cuy Sheffield stated, “every bank should have a crypto strategy.”
Furthermore, investors have been looking at cryptocurrency as an alternative investment class as covid and inflation worries continue to raise concerns, heading into 2022. As per another survey, over the last six months, the percentage of long-term crypto investors jumped from 23% to 30%.
Outlook 2022
When it comes to the outlook for 2022, a Bloomberg report pointed towards a macroeconomic environment that is positive for top cryptocurrencies like Bitcoin and Ethereum. The report noted,
“Divergent strength vs. the stock market and underpinnings from the sharp drawdown in 2021 may set the stage for further appreciation of cryptocurrency asset prices in 2022.”
The analysis noted that despite the risk of the crypto class, BTC and ETH will primarily contribute to the good performance. The report also commented,
“Stalwart crypto dollars, along with Bitcoin and Ethereum, are poised to stay atop the ecosystem vs. about 15,000 rivals jockeying for speculative leadership.”
Meanwhile, institutions might use BTC to ‘risk-off’ losses from other asset classes. Ballet Crypto CEO Bobby Lee recently told Bloomberg that the market is still in a bull cycle with its usual corrections. But, some opined that the $100,000 price prediction for Bitcoin is looking difficult this year.
According to Bitwise Asset Management Chief Investment Officer Matt Hougan, even as crypto is the best performing asset class, $100,000 levels can be mapped for next year. That being said, iCapital Network reported that corporations are adding cryptocurrencies to their treasury holdings as more banks and fintechs ramp up their crypto offerings.
