- According to Coinbase, approximately 70% of professional investors believe Bitcoin is currently priced below its actual worth.
- Most big players plan to buy more or hold their current positions if prices drop another 10%.
- Expected interest rate cuts and a growing GDP may boost digital assets later this year.
The crypto market is currently moving through a rough patch and Bitcoin has seen its price drop since it reached a peak in October. Because of this, many people are now watching the charts as gold and silver reach new highs.
However, professional money managers do not seem worried about what is going on, and a new report from Coinbase shows that most large firms think Bitcoin is undervalued right now.
Major Firms See Bitcoin as Undervalued Amid Market Stress
These investors looked at the price range between $85,000 and $95,000 during a recent survey and about 71% of them said this price does not show the true value of the asset.
In fact, only a tiny fraction of them felt the price was too high. This sentiment comes at a time when traditional safe havens are performing very well and Gold recently crossed the $5,000 mark.
Meanwhile, Bitcoin is down about 30% from its all-time high of $126,080.
This happened as the crypto space faced a massive shock on October 10, when a market crash wiped out billions of dollars in leveraged positions. Since then, prices have mostly moved sideways or downward.
External factors are also making investors afraid, including trade threats and tensions in the US, China and the Middle East. Through it all, Coinbase warned that trouble in energy markets could continue to hurt how people feel about risk.
Despite these hurdles, professional investors still strongly believe Bitcoin is undervalued. Independent investors are a bit more careful with their decisions, but 60% of them still agree with the institutions.
Just 4% of surveyed firms see the market as overpriced, signaling that major money managers are waiting to make their move.
Institutional Plans to Buy the Dip
When asked what they would do if prices fell another 10%, 80% of institutions said they would hold or buy more.
These investors do not seem interested in selling during a panic. Instead, they are viewing these moments as chances to build their portfolios and over 60% of these investors have actually increased their holdings since the October peak.
This behaviour shows a high level of conviction as many of these firms believe the market is currently in an accumulation phase.
They view the current bear market sentiment as temporary within the supercycle, even as volatility scares some retail traders.
Economic Factors That Could Help Prices
The economy actually looks quite stable despite the drama in the news. Consumer inflation stayed around 2.7% in December and real gross domestic product grew by more than 5% in the final months of last year.
These numbers show that the financial foundation is solid and Coinbase believes this stability will eventually help the crypto market find its feet again.
Central bank decisions are also a huge part of this, because many experts expect the Federal Reserve to cut interest rates twice this year.
Lower rates often make riskier assets like crypto more attractive to investors and if borrowing becomes cheaper, more money could flow into the crypto space.