Institutional investors anticipate a significant correction in the cryptocurrency market next year.

According to a Natixis Investment Managers study, many institutional investors anticipate a significant drop in the cryptocurrency market next year. Despite perceiving cryptocurrency as the most likely candidate for a severe correction, institutional investors are warming up to the asset class.

On Wednesday, Natixis Investment Managers released the findings of a worldwide institutional investor study. The firm surveyed 500 institutional investors globally who oversee $13.2 trillion in assets for public and private pensions, insurance, foundations, endowments, and sovereign wealth funds. There are around 100 institutional investors in the United States that manage $1.3 trillion in assets.

Institutional investors were polled to predict which markets will have significant corrections in the coming year. According to the poll findings, “institutions see the potential for corrections in a variety of asset classes and sectors.”

They think the top contender for a major correction next year will be cryptocurrencies.

According to Natixis, cryptocurrency is at the top of the list of correction fears, with more than half of the institutions polled advocating for a correction. Following that are interest-rate-sensitive bonds (45%), equities (41%), and technology (4%). (39 percent ).

Despite predictions of a huge drop in the cryptocurrency market, institutional investors are warming up to the asset class. Natixis made the following observation:

Even as crypto is the top contender for correction, institutions are beginning to warm to digital currency.

“Four in ten consider crypto to be a legitimate investment option,” Natixis stated, “and of the 28% who invest in crypto, 90% say they will maintain (62%) or increase (28%) their allocation.” Meanwhile, 87% of institutional investors anticipate central banks to regulate cryptocurrencies at some point.

In recent months, a rising proportion of investment firms have expressed interest in cryptocurrencies. Goldman Sachs, a prominent investment firm, stated in May that institutions are drawn to bitcoin due to a fear of missing out. According to a July poll conducted by Nickel Digital Asset Management, 82% of institutional investors and asset managers intend to raise their crypto exposure between now and 2023.

Patrick

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