More than half of those polled by Natixis Investment Managers believe the likes of Bitcoin and Ether will suffer a pullback next year.
Cryptocurrencies are the "top contender" for a major correction in 2022, according to a survey of institutional investors.
More than half of those polled by Natixis Investment Managers believe the likes of Bitcoin and Ether will suffer a pullback next year.
By contrast, 45% believe that "interest-rate-sensitive" bonds will be subject to a correction, 41% think stocks are due to cool down, and 39% expect a retreat in the technology sector.
Although the figures do seem gloomy, institutions don't seem deterred by the potentially choppy waters that lie ahead for digital assets.
Some 28% of those surveyed have gained exposure to cryptocurrencies — and of those 62% say they intend to hold on to their coins, while 28% are planning to make further acquisitions.
Regulation is set to remain a hot-button topic heading into 2022, with about 90% of institutions predicting that central banks will need to have oversight of cryptocurrencies if they are to achieve further adoption.
But the future role that the likes of BTC and ETH can play in the economy is uncertain. Just 28% believe such digital assets could one day replace fiat currencies — a direct contradiction to the Bitcoin maximalists who are adamant that it will succeed the dollar.
And while 33% of those polled think cryptocurrencies could help "level the playing field for developed nations," only 29% think emerging market countries should consider embracing Bitcoin as legal tender. Put another way, it seems most institutions believe El Salvador's move wasn't a good idea.
Listen to the CoinMarketRecap podcast on Apple Podcasts, Spotify and Google Podcasts
Plenty of Unknowns in 2022
The Natixis survey also explored some of the other economic trends that could dominate 2022 — with uncertainty surrounding the coronavirus pandemic set to rumble on into a third year.
Of those surveyed, 73% predict that interest rates will rise — something that could affect Bitcoin's attractiveness.
And in a rather worrying development, 68% believe that the bull market on Wall Street will come to a juddering halt when the Federal Reserve turns off the money taps.
The central bank's chairman, Jerome Powell, has hinted this will happen sooner rather than later in a bid to curb runaway levels of inflation. Given how the correlation between cryptocurrencies and stocks has increased in recent months, this could be a cause for concern. We're due to find out more about the Fed's thinking next week, once the next meeting of the Federal Open Market Committee concludes.
As reported by CoinMarketCap Academy yesterday, Bloomberg Intelligence has forecast "initial headwinds" for Bitcoin if the stock market suffers a pullback — but ultimately believes that the world's biggest cryptocurrency is in a stronger position because of how it suffered a 50% correction over the summer. Senior commodity strategist Mike McGlone doubled down on his bullish stance by arguing it's a matter of time before BTC hits $100,000.
