Bitcoin

Ethereum

Bitcoin, the world's largest cryptocurrency, has jumped almost 50% this year from around $16,500, where it was stuck in early January after a major cryptocurrency exchange, FTX, went bankrupt.Risk assets sold off because of expectations global central banks would stick to their aggressive rate hikes policy for longer than market predictions.Still, the 15-year-old Bitcoin, and Ether, the coin linked to the Ethereum blockchain network, have surged despite crypto-specific risk events like regulatory changes, increased scrutiny and the collapse of major industry players.Crypto investment platform Q9 Capital wrote in a note earlier in February, "Bitcoin bolted past $24,000 for the first time in two weeks...The asset had dropped below $21,600 recently amid growing anxiety about crypto regulation and future Fed moves to tame inflation, but those concerns seemed to fade quickly."Similar to that view, a Blockhead survey of 20 analysts at investment management and research firms showed larger cryptocurrencies have already bottomed out, and institutional investors are broadly still interested in digital assets."The path of least resistance for cryptos in the year ahead is up," said a Chief Investment Officer (CIO) at a large asset management firm in London."Cryptos have taken a beating, with trades toward the end of 2022 factoring in the current risks, including the possibility of a global recession and 'higher for longer' interest rates worldwide," added the CIO.AI vs Blockchain InvestmentA separate survey by global financial services giant JP Morgan showed artificial intelligence (AI) and machine learning were named by more than twice as many institutional traders as blockchain and distributed ledger tech as the technology that will have the greatest impact on the future of trading over the next three years.The JP Morgan survey shows long-term investors are shifting their focus toward the buzz around AI and moving away from digital assets and related investments, including the hot blockchain technology.That annual survey of traders' opinions covers various assets and aims to shed light on "upcoming trends and the most hotly debated topics."In addition to the recent consumer and commercial hoopla about accessible AI technology like ChatGPT, the chaotic bear market in cryptocurrencies appears to have changed the perspective of those surveyed by JP Morgan.Addressing crypto specifically, JP Morgan discovered that 72% of traders "had no plans to trade crypto or digital coins," with 14% indicating they aim to trade within five years.Due to rising interest rates and high-profile crypto business failures, investor confidence plummeted in 2022, sharply lowering cryptocurrency prices.<h3 id="investors-still-interested-in-crypto">Investors Still Interested in Crypto</h3>But a Blockhead survey of funds with over US$5 trillion in assets under management (AUM) showed all 15 respondents disagreed with the outcome of the JP Morgan poll.Earlier in February, Michael Demissie, head of advanced solutions at Bank of New York Mellon, cited a 2022 research of the custodial bank's clients to assert that digital assets were "here to stay.""What we see is clients are absolutely interested in digital assets, broadly," BNY Mellon's Demissie had said at a FinTech and Regulation Conference.Demissie referred to a study by BNY Mellon in October 2022, in which more than 90% of respondents said they planned to invest in tokenized assets over the next two years.He added that stricter regulations are the need of the hour."It's important that we navigate this space in a responsible way. We absolutely need clear regulations and rules for the road. We need responsible actors who can offer reliable services that live up to investors' trust," said the head of advanced solutions at BNY Mellon.<h3 id="crypto-outlook-upgraded">Crypto Outlook Upgraded</h3>According to the latest Blockhead survey of 20 analysts conducted February 21-28, Bitcoin is now forecast to end this June at US$27,000 and rise further to US$30,000 by the end of 2023, from around $24,700 currently.That compared to US$22,500 and US$26,500 predicted for those periods in the previous Blockhead poll three months ago.Forecasts in the latest survey ranged from US$24,000 to US$40,000 for bitcoin by the end of 2023, compared to a low of US$15,000 and a high of US$35,000 range in the previous poll.By the end of next year, the world's largest cryptocurrency was forecast to jump to US$38,000, over a 50% jump from its current price, with the mst optimistic call being for bitcoin to reach US$50,000.<h3 id="ethereum-forecast-to-rise-sharply">Ethereum Forecast to Rise Sharply</h3>Ether, too was forecast to jump. The consensus showed ether forecast to rise $1,900 by end-June, and extend its rally to US$2,350 by the end of this year.In the previous poll, the coin linked to the Ethereum blockchain network was predicted to rise to US$1,650 by mid-2023 and climb to US$2,000 by the end of December.Ether was forecast to gain further next year and end 2024 at US$3,000, nearly a 79% rise from its current level of around US$1,679."The broad predictions for cryptos to gain are still conservative compared to best-case scenario forecasts, which we think could fast turn into a base-case scenario perdictions," said a fund manager at a large US investment management firm in Boston."News of regulations and increased scrutiny must be lauded, not frowned upon. If anything, rules will help set the risk aside for cryptos," added the US fund manager.The survey was conducted by Research Garage, on behalf of Blockhead. Responses were asked to be strictly anonymous and based on a speculative outlook and not forecasting models.The world of Web3 can be quite a whirlwind. Here at Blockhead, we understand how busy crypto is keeping you, so we kindly send out two newsletters each week: <a href="https://blockhead.co/tag/blockbeat?ref=blockhead" rel="noopener noreferrer nofollow">BlockBeat</a> for a wrap-up of the week’s news and <a href="https://blockhead.co/tag/blockhead-brief?ref=blockhead" rel="noopener noreferrer nofollow">Blockhead Brief</a> for weekend happenings as well as what to look forward to in the week ahead. To avoid FOMO and access member-only features, click <a href="https://www.blockhead.co/#/portal/" rel="noopener noreferrer nofollow">here</a> to subscribe.

Crypto Surge, Interest in Digital Assets in Play

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