We investigated a rather illuminating survey by the Deutsche Bank that was taken across 2000 of their customers, all of whom were retail investors based in Europe, the United Kingdom, or in the United States.
The survey was taken after the approval of the spot Bitcoin ETF (Exchange Traded Funds) with rather surprising results, illustrating a surprising lack of confidence in the cryptocurrency industry amongst the participants.
The results of the survey found 33% of respondents believe that Bitcoin will drop below $20,000 by the end of 2024.
Further findings of the Deutsche Bank Survey were that 39% of participants believed that Bitcoin would continue to exist in future years but 42% were “anticipating its disappearance”.
The Deutsche Bank Survey had a layer of findings to add perspective and context to the surveyed 2000 participants. It found that two in three of the participants had a limited or poor understanding of the crypto world. Hopefully, this doesn’t include the users at the main crypto betting sites.
More than 50% of those participants went on to say they had serious concerns that there would be another major cryptocurrency collapse within the next two years.
Deutsche Bank noted on the report that the sentiments towards cryptocurrency had probably been affected negatively through a recency bias over a couple of major trials that have been in the news during the last few months of 2023.
The collapse of FTX and the subsequent Sam Bankman-Fried trial got headlines around the globe and, undoubtedly, led the way. Nonetheless, the crackdown by Law Enforcement involving Binance CEO, Changpeng Zhao and his house arrest in America awaiting trial is a very serious add-on for those doubters.
To compound issues for the Bitcoin ETFs and the industry, there has been a recent outflow of funds to consider. The deficit for last week was estimated at $158 million after a third successive day of losses on the penultimate week of January.
Grayscale Investments, whose trial victory over the SEC (Securities Exchange Commission) opened the doors for ETFs, also suffered terrible losses of over $450 million in outflow during the whole of January.
This bad news overshadowed the good ones. Last week Blackrock’s iShares Bitcoin Trust invested $65 million in ETFs as well as Fidelity, who themselves brought $126 million into the markets.
Overall, there is a bright side, given that since the opening of the ETF business, there has been a net inflow of over $800 million despite being skewed badly by those recent losses.
David Lawant, of FalconX, insisted in a tweet that the long-term future of Bitcoin is bullish with forecasts that the market will eventually stabilize.
The two major driving forces of spot BTC ETF net flows (GBTC bleeding $500m+ vs. IBIT and FBTC bringing in hundreds of millions of dollars each daily) will both taper off.
While the former dominates in the short run, the latter will dominate in the medium/long run by a mile.— David Lawant (@dlawant) January 23, 2024
This perspective and opinion were shared by two other industry experts, Matt Hogan of Bitwise, and 21Shares President, Ophelia Synder, who insists the current sceptics are misplaced and these are just the natural early fluctuations of a market still finding its feet in the industry.
We are still of the opinion that the Bitcoin Spot ETF approval will be seen historically as a seminal point of change. The reasons for this are the flood of funds that is anticipated into the digital monetary system, bringing greater depth, buoyancy, and importantly, footfall.
We have always believed that bigger footfall brought by the financial giants of Invesco, Fidelity, and Blackrock will naturally mean more households are invested within the industry. This is bound to bring growing confidence amongst the older investors who have struggled with trusting the cryptocurrency age.
We agree with the industry experts David Lawant, Matt Hogan, and Ophelia Synder that the ETF market is brand new and hence settling down.
There have been some overreactions to Deutsche Bank’s survey, but when you delve deeper into the report and find that 66% of the respondents are unfamiliar with the crypto world, the results are understandable. They are bound to be worried and sceptical but over time there will be more households invested in cryptocurrency than ever before and the digital monetary system will become a more accepted part of life.