The year 2021 has been recorded as the year of institutional investors who carried Bitcoin to approximately 70 thousand dollars. According to the latest report from research firm Messari, such a bull run would not have been possible without massive inputs from institutional investors like Paradigm, a16z and even 3AC, but in 2022 the situation changed drastically and reversed.
Although investors are aiming to make the right exit from the market during the last bull run, the opposite is the case today. Institutions have embarked on a search for potential entry points to maximize their profits in the market. For this reason, they are interested in buying at the prices on the days when the pain threshold is highest.
In their report, Messari analysts and experts believe that institutions are returning to the cryptocurrency markets even though some funds are low or not profitable at all. The same scenario was observed in 2018, when institutions made their first purchases, when Bitcoin was trading at or below $10,000. Buying BTC today is similar to buying it in 2018, given that the largest cryptocurrency, Bitcoin, has lost more than 70 percent of its value since 2021.
In addition to the potential behavior of institutional investors, Messari's report also looks at other issues such as the decoupling of the cryptocurrency industry, the market's growth potential, and the belief in alternative L1s.
Messari experts underline that these subsectors are generally diverging from the cryptocurrency industry, given the tremendous growth of DeFi, NFT and other sub-sectors of the digital asset industry in terms of different segments of the industry.
Analysts also believe that NFTs could accelerate the adoption of cryptocurrencies in the future if the industry's infrastructure expands and brings more tools for content creators and reputation management given the current situation. On the other hand, it is emphasized that decentralized finance (DeFi) has not yet resolved the technical and security issues to become more usable in the future.