- The future outlook of cryptos is optimistic, despite the current bear market conditions.
- Institutional investors are taking advantage of this period to reap long-term benefits from the assets.
After the downfall of TerraUSD and LUNA in early 2022, the cost of every main cryptocurrency dropped. Now, a multitude of companies related to crypto are encountering major financial obstacles, even insolvency. For instance, at the end of November, FTX and FTX.US filed for Chapter 11 bankruptcy. BlockFi faced a similar issue and filed for Chapter 11 bankruptcy that same month.
The ripple effect of this crash in cryptocurrency is still being felt by many and has been nicknamed "crypto winter." However, the period of decline in the cryptocurrency market hasn't stopped institutional investors from increasing their allocations. According to CryptoMonday.de, 58% of institutional investors said they intend to increase their crypto holdings during crypto winter.
CryptoMonday CEO Jonathan Merry commented on the data saying,
Institutional investors are increasingly convinced of the long-term potential of cryptocurrencies and blockchain technology. Despite market volatility, they remain confident that the innovative potential of these technologies is worth investing in now. The increasing institutional interest in cryptocurrencies and blockchain technology shows that the sector is maturing and will continue to do so despite market cycles. The industry's long-term viability as an asset class should no longer be doubted.CryptoMonday CEO Jonathan Merry
Cryptocurrency’s Potential
For many investors, the crypto winter is seen as a time to grow and prepare for the future. Their primary reason for investing in cryptocurrency is their chance to see extraordinary growth, with most associating it with modern technology. They also look out for regulatory compliance and clarification when choosing a partner, which is essential to eventual success.
Overall, it is clear that institutional investors continue to view cryptocurrency as an attractive opportunity to generate alpha. As the market continues to evolve and develop, they remain optimistic about the long-term outlook of digital assets and their potential to generate high returns.
Regulatory Compliance
With more clarity from regulators and improved infrastructure, institutional investors will continue to show confidence in digital assets for years to come. This could significantly boost the cryptocurrency industry, providing increased stability and viability. With this in mind, institutional investors will likely play an essential role in the future of cryptocurrency.
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