Here’s What’s Stopping $108.4 Billion Wealth Managers From Investing in Bitcoin: Bloomberg

Youri Molchan

A Recently Conducted Survey Shows What Makes Financial Institutions Hesitant to Invest in Bitcoin and Other Cryptos

Bloomberg shared the results of a recent survey by Nickel Digital Asset Management, the largest regulated crypto hedge fund in Europe.

Wealth managers and financial institutions from the US, UK, UAE and Europe, who collectively work with $10.8.4 billion under management, participated in the survey. They bring together a total of 50 asset managers and 50 institutional investors.

Top Reasons They’re Hesitant About Bitcoin

A total of 79% of respondents see crypto custody as the biggest stumbling block to potential investment in the crypto space, while 67% cited the volatility of Bitcoin and other cryptos. For 49%, the problem is the current regulatory environment (or lack of appropriate regulation).

Two percent are concerned about environmental issues caused by the carbon footprint of proof-of-work miners (this consensus algorithm is used to mint Bitcoin, Dogecoin, Litecoin and other crypto).

Expanding SEC regulatory powers is a good thing, investors say

Those who took part in the survey also believe that proper regulation of cryptocurrency assets in the United States would be good for the industry and allow them to invest in them.

Thus, 76% of respondents believe that in 2022, the SEC regulator will be granted more power to regulate crypto exchanges and other platforms dealing with crypto, which was asked of the US Congress by the current president, Gary Gensler, in 2021.

According to the poll, 73% of investors and wealth management funds believe this will have a positive impact on crypto prices, and 32% believe “it will have a very positive effect.”

Bitcoin drops to $42,000: reasons

On January 5, the flagship cryptocurrency failed to hold above the $46,000 level and plunged nearly 9% from $46,630 to the $42,500 area.

As covered by U.Today, there were three likely reasons for this. The first was the news that the US Fed might raise interest rates as early as March this year. The second reason came from Kazakhstan, the second largest mining hub, as the internet was shut down due to a massive wave of protests demanding the resignation of the current president. The Bitcoin hashrate plunged 165 EH/s after recovering to 229 EH/s six days ago in early 2022.

The last crucial reason was cited by Fundstrat’s managing director, Mark Newton. On January 6, he tweeted that the $45,655 support level was vital for Bitcoin to hold. Now it has been broken and BTC appears to be heading below $40,000 for the first time since early fall 2021.

Dolores W. Simon