Luno survey finds market sentiment still bullish

It’s been an exciting year for cryptocurrency so far, from Elon’s tweets to new all-time highs…

To get a better idea of what to expect next, we recently asked our customers how they see cryptocurrency shaping up in the future and how they plan to make the most of the opportunities that may arise.

Confident customers

In May, Bitcoin hit an all-time high of more than $63,000 – the culmination of a relentless run of weekly gains that began last November when the leading cryptocurrency began to soar in value and a flood of institutional investors including MicroStrategy and Tesla began to arrive on the scene.

Recent months have seen a somewhat less buoyant market, with Tesla CEO Elon Musk’s announcement that his electric car company would stop accepting cryptocurrency as payment and China’s crackdown on bitcoin miners creating a perfect storm that saw a drop of almost 30% in the following months. There’s been a lot of discussion lately as to whether $63,000 marked the top of this bull run and we were now on a downward slope, or whether this was a lull before another charge, as has been the case in previous bull runs.

If our survey respondents are to be believed, it certainly looks like it could be the latter. They expressed a great deal of confidence about the bitcoin price, with 59.4% stating their belief that it will continue to move toward $100,000 at a steady pace. A massive 83.7% of our customers believe BTC value is going to exceed its current price by year end, indicating that among cryptocurrency fans at least, there’s a strong belief that there’s still good times to come. Will they be proved right?

Bullish beyond bitcoin

It’s not just Bitcoin that’s had a big year. 2021 has also seen the meteoric rise of the altcoin, with cryptocurrencies like Ethereum soaring in value. Ethereum’s early days were spent largely in Bitcoin’s shadow, but 2021 was a breakout year for the cryptocurrency. With an average growth rate of 197.1%, Ethereum is now a sky-scraping ~830% more valuable than it was just one year ago. This comes as analysts look towards Ethereum 2.0 and a transition from a proof of work consensus model to proof of stake, considered particularly important given an increased focus on the environmental impact of cryptocurrency. Proof of stake is widely considered to require less energy. You can read more about Ethereum 2.0 here.

XRP is another one that has seen big gains, despite a difficult year that has seen it embroiled in a headline grabbing court case with the US regulator, Securities Exchange Commission (SEC). The SEC is suing Ripple, who created the cryptocurrency, having accused it of being a security and therefore the original token sale as having failed to abide with the rules. The court case is ongoing.

It’s not been such a good year for Bitcoin Cash or Litecoin, which have both fallen out of the top 10 largest cryptocurrencies by market cap despite themselves seeing significant price gains.

Despite neither having particularly good fortunes, it seems many of the respondents to our survey are still bullish on their prospects, although interestingly, there seems to be a significant global divide when it comes to altcoins. While 64.5% of our South African users are most optimistic about Bitcoin, Ethereum is second at 55.4%, followed by XRP (28.6%), Bitcoin Cash (25.9%), and Litecoin (17.8%). Meanwhile, although Malaysian and British customers both share strong enthusiasm for Bitcoin, they’re most optimistic about Ethereum. Nearly 70% of Malaysian customers are feeling optimism for Ethereum, with 75% of investors in Great Britain sharing the same sentiment.

Pragmatic investment decisions

Although it can be easy to get bogged down in short term price movements, it’s still important to remember that cryptocurrency is a long-term investment and much of its potential to transform the financial system is still yet to be realised.

Our survey suggests that the majority of investors understand this with 38% telling us that they intend to hodl their investments. There are still many who consider themselves to be actively trading, meaning they’re buying dips and trading on a daily basis, with 28% claiming to fall into that camp, but the idea of bitcoin as something you’re in the long haul for seems to have certainly taken root.

In summary, our respondents are extremely positive about cryptocurrency and where it’s heading. They’re also thinking critically about Bitcoin and beyond, and are especially optimistic about altcoins like Ethereum. This is leading many to adopt a long-term approach to their investments, building on their understanding. Where do you think cryptocurrency will we be this time next year?