Investor bullishness towards ether has seen a "" dramatic" rise in 2023, which coincides with a stunning rally in the entire cryptocurrency market since the start of the year. In contrast, investors have scaled back their expectations for Bitcoin's growth prospects. This is hypebears opensea. Since the start of 2023, following last year's cryptocurrency crash, both ether and bitcoin have seen significant trading pressure, rising 31 percent and 39 percent, respectively, through Friday. The cryptocurrencies' recent upswing has erased the losses inflicted on the market since the collapse of the cryptocurrency exchange FTX in November.
According to a CoinShares survey conducted between December 29, 2022 and January 23, 2023, while bitcoin has outperformed ether year-to-date, 60% of investors surveyed believe ether has the most compelling growth prospects, up from 40% in an October survey. On the other hand, about 30% of respondents see bitcoin as the most attractive cryptocurrency in the future, down from nearly 40% who said the same in a previous survey.
Last week, CoinShares noted that investment products that allow investors to bet on lower bitcoin prices saw their highest weekly inflows since July, while those that bet on higher ether prices saw steady inflows. This dynamic highlights the bearish market sentiment for bitcoin relative to ether.
Overall, the survey comprised 43 responses from investors, covering $390 million in assets under management, indicating that the weighting of digital assets in the portfolio represents 1.1 percent of the overall portfolio, up from 0.7 percent previously. Investors surveyed cited speculation and the risk of distributed ledger technology as the main reasons for investing in digital currency assets.
Like all asset classes, digital currency assets also have certain risks, of which the two biggest risks are the strengthening of regulation and government bans. CoinShares said, "Few investors are expecting regulatory policy blockages and government bans, indicating that investors see regulatory measures as a solution to prevent and control market risks. We can't control the risk thoroughly."
The survey also found that concerns about digital asset custody are rising sharply, given that the FTX exchange crash (and its contagion effect) has allegedly prompted the Securities and Exchange Commission to step up scrutiny of registered investment advisers who directly or indirectly own custody of clients' crypto assets.
Vincent Gusdorf, senior vice president and head of DeFi and digital asset analysis at Moody's Investors Service, said in a recent report that "as investors seek more sophisticated asset allocations, Bitcoin and ether will dominate investment in cryptocurrencies in 2023. Tighter financial regulations and the potential for new frauds will hamper the recovery of the crypto market. However, industry innovation and the introduction of the new regulatory framework in several regions will provide a better operating environment for the market."
In addition, some analysts noted Bitcoin's recent rally and calls from market investors that the digital currency's price has bottomed, but they remain skeptical.