Key Insights
- Institutional investors keep their faith intact in the crypto market.
- Investors to reverse their investment strategy and switch to buy-and-hold
- Crypto prices to rise in the next 12 months
A recent survey conducted on institutional investors by Coinbase reveals a strange trend amongst institutional investors. The study conducted between 21 September to 27 October reveals investors to still invest in cryptocurrencies irrespective of the bearish market.
The results reveal around 62% of the respondents increased their investments amidst the bear market. About 58% of institutional investors believe crypto prices to spike in the next 12 months.
Coinbase Survey Data
Coinbase collected the data and responses from 140 institutional investors residing in the United States of America. They had around $2.6 trillion of assets and thus served as the best sample to project rational investment patterns.
In October, Fidelity Digital Assets surveyed institutional investments, which showed similar results. In a recent interview, Chris Kuiper, the Research Head of Fidelity Digital Assets, claimed the long-term investment pattern amongst the respondents. According to him, the investors are assessing the crypto market from a long-term perspective. Hence, short-term price fluctuations are far from affecting their investment decisions.
New Strategy of Institutional Investors
According to the survey conducted by Coinbase, only 12% of institutional traders reduced their investments in the massive price fall of the crypto market. Evidently, the rest are still driven by hope. Not only that, but the report also indicates a surprising shift in investment patterns.
Most investors preferred the buy-and-hold strategy in the bearish crypto market. In short, investments went bullish when the market went bearish.
The dynamic nature of the crypto market is what directs such a strategy. Crypto tokens reached their all-time low suddenly after witnessing a massive spike. Because of such dynamic price shifts, investors believe crypto prices will rage soon.
Why Should Investors Buy and Not Sell?
Though buying crypto assets may look irrational in the bearish market, it is one of the most recent and efficient investment trends. Several investors reported losing several million dollars as they sold their tokens at a lower price. While such a decision under the uncertainty of the market is obvious, that is a mistake most investors make.
Instead, most financial experts suggest buying cryptocurrencies in a bearish market. This indicates buying them at a lower price and holding them unless the prices rise. Once they do, selling them can be the best way of getting the expected returns. Hence, one thing is for sure; one needs to have a long-term strategy to survive the volatile crypto market.
