Analysis from Investment Firm Bernstein: “Despite the Falling Price of Cryptocurrency…”

In a research report, investment firm Bernstein released Monday, to cryptocurrencies presented interesting data on

“Corporate Companies Maintain Their Commitment Despite the Decline in Cryptocurrency”

The company is in the bull market of 2020/21 bitcoin and asset managers actively investing in the cryptocurrency markets continue to invest in the industry and remain committed to digital assets, with some planning to allocate more capital to the industry.

The report stated that although private market investors are “much more sensitive to price valuation”, they continue to seek opportunities in the sector.

As such, “crypto converters” remain active in the industry, but investors who were undecided about digital assets in late 2021 delayed their plans.

Bernstein says he sees certain major asset managers continue to build their digital asset strategies, and he expects these initiatives to result in “true direct digital asset allocations after 12-18 months.”

Analysts Gautam Chhugani and Manas Agrawal acknowledge that while this is probably the most encouraging part of the corporate adoption cycle, the real impact on the market is probably 12 months away.

Cryptocurrency companies and venture capital investors had raised enormous funds in 2021, some exceeding $1 billion. In contrast, fundraising for “liquid crypto strategies,” or tokens, was less than $100 million.

According to Bernstein, most investors were surprised by the smooth transition of the Ethereum blockchain to proof-of-stake (PoS), a process known as Merge, but they were even more surprised that ETH price plummeted afterward.

Merge was the first of five software upgrades planned for the Ethereum Blockchain and included the move from a proof-of-work (PoW) method to a more energy-efficient PoS consensus mechanism for verifying transactions and securing the network.

*Not investment advice.