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Crypto more attractive as SEC gets aggressive, investors say

Bitcoin will trade between $17,600 and $25,000 until the end of this year, according to a survey of market participants.

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(Bloomberg) – A crackdown by the U.S. Securities and Exchange Commission and other watchdogs that investigated the baddest companies in crypto is proving to be a boon for the industry, investors market players claiming they are more likely to invest in space after tougher enforcement action.

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Nearly 60% of the 564 respondents to the latest MLIV Pulse survey indicated that they view the recent spate of crypto lawsuits as a positive sign for the asset class, including the volatility of brands s has practically dissipated in recent months. Major interventions include U.S. regulatory investigations into bankrupt crypto firms Three Arrows Capital and Celsius Network, as well as an SEC investigation into Yuga Labs, creators of the Bored Ape collection of non-fungible tokens, or NFTs.

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“I’m on the ‘yes’ side. As a professional investor you need a regulated investment opportunity and this opens the door for more professional investors to get involved in crypto, if it is more regulated,” said Chris Gaffney, Chairman global markets at TIAA Bank. “The more they can extract crypto from the Wild West and get into mainstream investing, the better.”

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The sentiment extends to Bitcoin. Most investors were slightly more optimistic about crypto than they were when asked in July. Nearly half of those polled expect the world’s largest cryptocurrency by market value to continue trading between $17,600 and $25,000 through the end of this year – a deviation from to the sour outlook for this summer, when most said it was more likely to first fall to $10,000 than climb to $30,000. To be fair, respondents had a wider menu of options this time around than was available in the previous survey.

“Our investors have recognized and the market has recognized that decentralized protocols have unique advantages that can not only benefit crypto markets, but traditional markets more broadly,” said Mary-Catherine Lader, COO of Uniswap Labs. , in an interview with Bloomberg TV.

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While Bitcoin is down around 60% this year, its price has remained stuck between $18,171 and $25,203 since the previous survey was conducted, unable to significantly break out of this band. Volatility has also largely declined, with the Bitcoin T3 Volatility Index down 33% since the token hit an all-time high of nearly $69,000 on Nov. 10.

Bitcoin has maintained a strong correlation with risky assets as well as the S&P 500 since March, barely changing its position over the past three months as investors tarred the crypto with the same brush as everything else in an environment of rise in interest rates. Some 42% of respondents said they believed crypto’s correlation to tech stocks would remain the same over the next 12 months, while only 43% said they would increase their exposure to digital assets over the course of the year. of the same period.

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It has been a story of two halves for crypto in 2022, with the first half of this year being dominated by chaos. There have been bankruptcies, like that of Voyager Digital Ltd., and the $40 billion wipeout of the Terra blockchain ecosystem. Approximately $2 trillion in global value was wiped off the industry record at the end of 2021. In June, things started to change with crypto beginning to plateau at its current level, as the macroeconomic environment more wide deteriorated and traders turned to more traditional assets like bonds and currencies for profit.

Read more: Bitcoin is becoming less volatile than stocks raises the red flag

The lower volatility is “likely for indecision,” said Katie Stockton, managing partner at Fairlead Strategies.

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In September, the Ethereum network completed a major network upgrade known as Merge, which one estimate will reduce blockchain power consumption by around 99%. Still, only around a third of investors said they believe the so-called Flippening, where Ether’s market value eclipses that of Bitcoin, could occur in the next two years – a number that is largely stagnant since July.

Survey respondents also displayed a very broad church of opinion on crypto, emblematic of the fact that despite the sector’s relative infamy among traders, it is still a divisive topic. When asked to choose a word describing space, the two most popular responses were almost evenly split between “Ponzi” and “future.”

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“It’s almost like a religion – if you believe, you will always believe, no matter the cost or the headwinds,” said Victoria Greene of G Squared Private Wealth.

“The boom vs bust dichotomy perfectly describes crypto and the wide range of potential outcomes. There are so many unknowns, including regulations and platforms, as well as what it really is and what it will be used for,” she said. “So if you’re a true believer, you say this is the future.” People with a more traditional view may say it’s a Ponzi, she said.

For more market analysis, see the MLIV blog. To subscribe to MLIV Pulse stories, click here.

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