April’s Cryptocurrency Sentiment Report – In Summary

Every month, since November 2017, the Huobi Academy of Blockchain Application releases its cryptocurrency sentiment report – a report showcasing an index representing investor sentiment on future price movement of the cryptocurrency market. In each edition, respondents are asked to categorise, within five ranges, their expectations in regards to the movement of the market cap of the cryptocurrency market within three-time frames: short, medium and long-term.

The index represents a weighted average of the respondents’ answers, with weights attributed to the different time frames (the closer, the higher the weight). The final score ranges from 0 to 100 – with 50 meaning that the market outlook is neutral.

Despite the total cryptocurrency market capitalisation plunging from a high of $810 billion in January to a low of $250 billion in April, this month’s cryptocurrency sentiment index shows that investors remain bullish concerning the future growth of the market. The index scored 83.9 (a 17% increase month-over-month), with investors being more bullish concerning the long-term outlook of the market than in the short-term (75.9 vs 94). With most investors in the red for months, the optimistic outlook is certainly a positive.

Short-Term Sentiment – Bullish Sentiment, Despite Bearish Short-Term BTC Trend

80% of the respondents have a positive outlook concerning the market in the short-term, with 50% believing that the market will grow more than 30% within the next month. Concerning the bears, they make up the only 11.4% who believe that the market will decline further. In terms of market capitalisation, most expect the cryptocurrency market to close, at a minimum, just below $500 billion, or around $10,000 for BTC.

The increasing positive sentiment is further demonstrated when we compare this data with that from March, as at the time, 55.6% of the respondents believed that the market would increase by at least 10%, while 26.4% believed that the market would decline.

Ref: Huobi Academy of Blockchain Application

Medium-Term Sentiment – Increasing Positive Sentiment For the End Of The Year

Over the next 6 months, the outlook is even more bullish than for the short term, as 90% of the respondents believe that the market will grow, with 71.4% believing that the growth will be higher than 30%.

The increased positive outlook regarding the cryptocurrency market within the next 6 months could be explained by the fact that investors expect regulation to kick in, thus uncertainty concerning the market to decrease which might lead to institutional investors pouring large sums into the space, which would bring fresh capital to the market.

Ref: Huobi Academy of Blockchain Application

Long-Term Sentiment  – The Cryptocurrency Market Is Expected To Boom

Despite good outlooks for both the short- and medium-term, the most appealing sentiment concerns the long-run (more than 3 years) as more than 95% of the respondents believe that the market will grow, with 84.1% believing that the market will grow to $470 billion at a minimum – demonstrating that most investors believe that blockchain technology and cryptocurrencies are here to stay, despite short-term fluctuations.

As for the medium-run, the increased confidence concerning the growth of the market is explained by the fact that given the long time frame, there is an expectation of the entrance of institutional investors to the market, with a larger use of blockchain technology within the general public – even if they won’t always know they’re using blockchain-based systems.

Ref: Huobi Academy of Blockchain Application

Conclusion

Across the three timelines, investors are the most bullish concerning the long-term outlook of the cryptocurrency market, with 84.1% of the respondents expecting a rise higher than 30%. Long-term investors are the most optimistic, and short-term fluctuation might be more based on technical analysis and event-based decision-making (such as bad news/”FUD”) rather than on the technology itself.

Additionally, seeing the decreasing number of bearish investors across the time frames gives us cause for optimism, as it might not only show that the market bottomed out at the $250 billion seen on April 6th, but also that blockchain technology’s benefits are recognised by many, despite market fluctuations and current volatility.

Blockchain technology is here to stay due to the high benefit blockchain and distributed ledger technology can bring to companies, for instance in the IoT and supply chain industries, with other sectors of society, such as politics, undoubtedly seeing many similar benefits. We believe that the market has a lot of room to grow in the years to come, and are personal believers in what the underlying technology behind several crypto and blockchain projects can bring.

Huobi’s cryptocurrency sentiment report can be downloaded here.

Disclaimer: This is a sponsored article.

Jacek graduated with an M.A. in Finance from the Shanghai University of Finance and Economics. He lived in Europe and Asia, and always loved to dig into papers and research projects to really understand the key drivers and trends. He’s passionate about blockchain’s business application, the sharing economy, and FinTech.


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