- Bitcoin's value has plunged from its all-time high of nearly $68,000 to trade at about $20,000.
- That drop has left many Bitcoin holders concerned for their investments.
- However, a section of the American crypto community is optimistic that the coin will significantly reclaim some of its lost value.
If you've been holding onto Bitcoin since the beginning of the year, you've probably felt pretty frustrated lately. After a stellar 2021, where its value surged past the $68,000 markt, the king crypto has been in free fall for most of 2022. Since the second quarter, it has been trading at less than $20,000, a far cry from its previous highs.
Despite the recent Bitcoin price crash, not everyone is feeling the blues. In fact, according to a BanklessTimes.com data presentation, a large section of the American Bitcoin holding community is confident that the crypto will rebound. The site reports that the average American BTC holder is optimistic that the crypto asset's price will rebound to $37,000.
Some Bitcoin enthusiasts indeed feel greatly disappointed by the coin's recent performance. But while the short-term outlook may be uncertain, many people still believe in Bitcoin's long-term potential. To them, the asset is undergoing a temporary dip but will soon rebound.BanklessTimes CEO Jonathan Merry
Bitcoin has been showing signs of recovery starting on 30th September 2022. It rallied to above $20,000 at the back of a slight weakening of the dollar and a stock jump. And according to Vijay Ayyar, VP at crypto exchange Luno, this increase could be the start of a bearish rally.
American Crypto Holders are a Confident Lot
BanklessTimes' data presentation aligns with Morning Consult's Index of Consumer Sentiment (ICS) findings. According to the ICS, crypto owners are a confident lot. The ICS among American crypto owners is currently 15 percentage points higher than among all U.S. adults.
Consumer Sentiment for the general U.S. Public has plummeted significantly this year, dropping a record 13.5% low since mid-January. In contrast, the confidence within the crypto community dropped 8.1% over the same period. The fact that a typical crypto owner is likely younger and wealthier than the average American adult could explain this difference.
The Age Factor
Morning Consult found age to be a vital determinant of the differences in consumer confidence. Older Americans are more pessimistic due to fixed incomes, health risks, and memories of past episodes of high inflation. However, for the millennials making up 42% of American crypto owners, many of these reasons for a downbeat economic outlook don’t apply.
The study also revealed that cryptocurrency owners are more optimistic than all adults about their future personal finances. In May 2022, 44.4% expected their finances to improve over the next year, contrasting with only 27.1% of all U.S. adults and 29.5% of high-income adults. This more optimistic mindset may help this group invest in riskier assets like cryptocurrencies.
Crypto Ownership is About Making Money
According to the Morning Consult survey, digital assets are all about making money for most American crypto owners. The study found that two-thirds of crypto owners see it primarily as an investment rather than a way to make purchases.
Cryptocurrencies have seen explosive growth in recent years, with prices soaring and then plummeting in a matter of months. For investors, it can be a rollercoaster ride, but it can also lead to big profits. However, those who have successfully made money from crypto will tell you there's no guarantee that you will make money here; it takes a lot of research and knowledge to be successful.
The Clamour for Crypto Regulation
In the wake of the recent market selloff, there have been calls for increased regulation of the cryptocurrency space. This is no surprise, given the heightened volatility and risks associated with crypto assets. While the market has shown some signs of recovery, many retail investors and banks are still reeling from the losses.
In particular, stablecoins have come under fire recently, with some policymakers calling for greater oversight. The American public has joined in the calls too. According to a June poll, 21% of U.S. adults said cryptocurrencies should be more regulated than traditional financial assets, an increase of 4 percentage points from the year's start.
Given the current environment, it is likely that we will see more stringent regulations on crypto soon.
Contributors
