Loukas Lagoudis, executive director of ARK36, spoke with CNBC on Monday, suggesting that the Bitcoin bull run will continue into 2022 despite performing modestly over the past month.
With Bitcoin starting off the year at 47,000 USD, some have predicted a cooldown as regulation is set to impact the crypto market. However, despite currently trading under 50,000, the director of ARK36 believes that Bitcoin will continue to increase in popularity, particularly with institutional investors, who will be attracted to, rather than put off, by the increasing regulation.
“The current choppy and directionless price action with a possibility of further pressure to the downside has introduced a lot of uncertainty to the digital asset market”
Lagoudis added that:
“sustained adoption of digital assets by institutional investors and their further integration into the legacy financial systems will be the main drivers of growth of the crypto space”
The comments by Lagoudis that suggest that Bitcoin will continue to be a top performing asset class, are reinforced by a number of factors seen in 2021 that seem to support his predictions for crypto in 2022.
Despite the regulatory uncertainty, Lagoudis believes that the enhanced regulatory requirements seen in Europe and the US will enhance the sense of trust and legitimacy in the space. This in turn will lead to inflows of institutional investment, and investment banks that continue to set up crypto trading desks.
Bank of America, Citigroup, and Goldman Sachs are some of the banks that have launched crypto offerings, with Citigroup stating in August that they would be allowing clients to trade Bitcoin futures, to Goldman Sachs “relaunching” a new crypto desk.
A Goldman Sachs executive noted in June that they would be continuing to grow their crypto offerings, with Mathew McDermott, head of digital assets at Goldman revealing to Bloomberg that the appetite for cryptocurrency futures is enhanced when the price drops:
“We’ve actually seen a lot of interest from clients who are eager to trade as they find these levels as a slightly more palatable entry point. We see it as a cleansing exercise to reduce some of the leverage and the excess in the system, especially from a retail perspective.”
As institutional demand for Bitcoin continues to grow, Bitcoin’s low entry point into 2022 may see the continuation of 2021’s bullrun, particularly with the enhancement of regulation that makes the market much more attractive to institutional investors.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.