Here’s What’s Keeping $108.4 Billion Wealth Managers from Investing in Bitcoin: Bloomberg

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Yuri Molchan

A recently conducted survey shows what is making financial institutions hesitant about investing in Bitcoin and other crypto

Bloomberg has shared the results of a survey conducted recently by Nickel Digital Asset Management, the biggest regulated crypto hedge fund in Europe.

Wealth managers and financial institutions from the U.S., UK, UAE and Europe, which collectively work with $10.8.4 billion under management, took part in the survey. They comprise a total of 50 wealth managers and 50 institutional investors.

Main reasons that make them hesitant about Bitcoin

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

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

Expanding SEC’s powers of regulation is good, investors believe

Those who participated in the survey also believe that proper regulation around cryptocurrency assets in the U.S. would be good for the industry and would allow them to invest in it.

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 requested from the U.S. Congress by the current chairman, Gary Gensler, in 2021.

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

Bitcoin tanks to $42,000: reasons

On Jan. 5, the flagship cryptocurrency failed to hold above the $46,000 level and plunged almost 9% from $46,630 to the $42,500 zone.

As covered by U.Today, there were three likely reasons for that. The first was the news that the U.S. Fed could hike interest rates as soon as March of 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 that the current president resign. The Bitcoin hashrate plunged 165 EH/s after recovering to 229 EH/s six days ago as 2022 began.

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

Source: https://u.today/heres-whats-keeping-1084-billion-wealth-managers-from-investing-in-bitcoin-bloomberg