According to economists, crypto investors are now caught between a rock and a hard place. They fear missing profit despite the high risk of losing money. So, they may either reap a profit or incur huge losses because of the shaky crypto market. However, investors are prone to risk, ignoring all the potential pitfalls.
This year, digital assets have won luster with many reputable hedge funds as large investors expect a rally in the crypto market in 2023-2024. Interestingly, two-thirds of hedge funds (67%) intend to heavily invest in crypto by the end of 2022.
Bitcoin and Ethereum are the most popular assets, the Alternative Investment Management Association stated in the report. What is more, the fear of missing out, or FOMO, can be a powerful psychological force. It is extremely important for large investors not to stay out of the game and take their juicy slice in the crypto market. Therefore, unwary traders are ready to invest, glossing over the risks of losing money due to FOMO.
Recently, many big investors who own hedge funds such as Ray Dalio and Daniel Loeb, have changed their views on digital assets. Earlier, Dalio cast doubt on cryptocurrencies. However, in January 2022, he advised traders to have 1-2% of their portfolio in BTC. Daniel Loeb also backed cryptocurrencies although he did not disclose the size of his stake.
Currently, the crypto market is gripped by uncertainty as many analysts predict its collapse, while crypto enthusiasts are betting on a rally in 2023-2024. An upswing may take place amid a decline in bitcoin. Every 4 years, the number of bitcoins falls as the BTC code allows only a fixed number of bitcoins to be mined every year until the 21 million limit is reached.
