Investor sentiment toward ethereum (ETH-USD), the largest altcoin by market capitalization, has seen a “dramatic uptick” so far in 2023, coinciding with stunning year-to-date growth in the broader cryptocurrency market. In contrast, investors have bounced back bitcoin growth prospects (BTC-USD).
Since the start of 2023, following the cryptocurrency’s decline in the previous year, both ether (ETH-USD) and bitcoin (BTC-USD) have seen massive buying pressure, which is climbing 31% and 39%, that is, from Friday afternoon. Also, the tokens have recently erased their losses since the implosion of crypto exchange FTX (FTT-USD) in November 2022, a sudden event that roiled the market and tarnished the reputation of the industry.
Despite bitcoin’s (BTC-USD) YTD performance against ether (ETH-USD), a record 60% of investors believe ETH has the most compelling growth prospects, according to a CoinShares survey conducted between December 29, 2022 and January 23, 2023. ., up from 40% in the October 2022 survey. On the other hand, around 30% of respondents see bitcoin (BTC-USD) as the most attractive going forward, down from nearly 40% previously.
Last week, CoinShares noted that weekly inflows for investment products that allow investors to bet on lower bitcoin prices (BTC-USD) hit their highest mark since July 2022, while products that bet on higher ether prices (ETH-USD) recorded solid inflows. That dynamic underlines the bearish decline of bitcoin against ether.
Overall, the survey, which consisted of 43 investor responses covering $390 billion in assets under management, found that the weighting of digital assets in investment portfolios represented 1.1% of portfolios, up from the previous reading of 0.7%. Investors cited both speculation and exposure to distributed ledger technology as key reasons for taking stakes in the digital asset.
Like all asset classes, digital assets carry certain risks, the two biggest of which are increased regulation and government bans, “although few expect political blockers and government bans,” CoinShares said. “This suggests that investors see regulation as a solution rather than an outright ban.”
The survey also revealed a large increase in concerns about digital asset custody, which makes sense given that the collapse of FTX (FTT-USD) (and its contagion effects) has reportedly prompted the US Securities and Exchange Commission to intensify its scrutiny registered investment advisors who directly or indirectly have custody of clients’ crypto assets.
Vincent Gusdorf, senior vice president, head of DeFi and digital asset analytics at Moody’s Investors Service, expects bitcoin (BTC-USD) and ether (ETH-USD) to dominate the crypto landscape in 2023 “as investors look for established assets,” he said. . he said in a recent report. “Tighter financial conditions and the possibility of new frauds will prevent the recovery of the crypto asset market. However, innovation and the introduction of regulatory frameworks in several territories will provide a better operating environment.”
Alpha Contributor Wanted Digital Trend has noted the recent rally in bitcoin (BTC-USD) and market participants’ calls for a bottom, but remains skeptical.