Acuiti, a market intelligence provider, recently released its Crypto Derivatives Managers’ Insight Report for the third quarter of 2022. The report discovered that most polled professionals believed bitcoin would grow back to where it used to be – around $65,000.
On another side, the drop in cryptocurrency prices over the past few months – more than half the people surveyed expected regulators to take an even stricter stance against crypto-assets.
In its report for the third quarter of 2022, the firm discusses the effects of changing crypto values on its businesses, regulatory action, and anticipated impact on market dynamics.
Impact And Prediction Of Fluctuating Bitcoin Price
Acuiti Insight analysis reveals that the price of bitcoin has fallen to trade in a $19,000-$23,000 range since mid-June after reaching all-time highs of almost $65,000 in November of last year.
It has destroyed nearly $2 trillion of retail and institutional wealth and forced many people into bankruptcy. However, it led everyone to wonder how cryptocurrency and Decentralized Finance (DeFi) will be regulated going forward.
The study also indicates that 17% of respondents think bitcoin would never reach $65,000. Furthermore, most believe it won’t happen until 2024 or 2025, despite 7% saying they’ll see the high value in the upcoming year.
Image Source: Acuiti
Consequently, 58% of the network reported growth in their exposure to Bitcoin and Ethereum, while just 18% reported reductions, supporting this optimistic forecast. As a result, just 15% of investors increased their exposure to alt-coins, while 25% decreased their exposure.
Nonetheless, a significant decrease in retail investment is predicted due to the crash of cryptocurrency prices. However, only 13% believe that institutional investors will back out due to this crash because they think an established and sustainable market will surface from this rubble.
The Need For More Rigorous Regulation
Recent declines in cryptocurrency prices will likely cause regulators to adopt stricter regulatory measures. For example, the SEC has recently been pursuing an insider trading case against a former Coinbase manager, who they view as violating securities laws by engaging in trades involving at least nine crypto-assets.
Meanwhile, the MiCA framework for Europe is nearing approval and could serve as an example to other countries interested in regulating cryptocurrencies. Additionally, the institutional crypto derivatives market is widely believed to need regulation to expand. However, it still has concerns about how effective the frameworks that have been finalized will be in driving market expansion.
Furthermore, the survey found that 58% of participants believed decentralized finance (DeFi) would be a significant component of the industry’s future. In contrast, only 35% of people thought banks would not interact with DeFi in the future. Meanwhile, 50% believed traditional financial infrastructure (TFI) would play an important role.
The analysis also suggests that there will be more convergence between traditional and new finance if laws are implemented for the cryptocurrency industry. When it comes to investing in cryptocurrencies, banks will play a more significant role than ever.
The resounding majority of the network—nearly 79%—thought that only “fully supported Stablecoins” would thrive in terms of the future of stablecoins. Just 15% of respondents thought central bank-issued digital currencies would ultimately replace stablecoins.