As we usually do, we like to extract the most important part of the Kraken Intelligent Crypto report for our readers to digest more easily.
INTRODUCTION
As the cryptoasset market approaches the end of another eventful year, Kraken Intelligence conducted its second VIP client sentiment survey for 2020. The purpose of the survey is to gauge market sentiment and expectations, as well as capture perspectives on various industry developments, from Kraken’s most active clients. During October 2020, Kraken Intelligence amassed more than 350 responses. All participants were given the option to skip questions. Answers making up less than 1% of all responses for open-ended questions were excluded. Survey results from our 1H2020 sentiment survey published in February 2020 were also considered in this report.
KEY TAKEAWAYS
-Approximately 66% of respondents believe the cryptoasset market is in a bull market, while 26% and 9% believe we’re in a bear market or are unsure, respectively. In 1Q2020, 44% of respondents stated that they thought we were in a bull market and 24% signaled a bear market.
-Compared to our 1H2020 sentiment survey, the 2H2020 average 2020 price target for bitcoin (BTC) and ether (ETH) fell from $22,866 to $14,886 and from $810 to $549, respectively. The average 2021 price target for bitcoin (BTC) and ether (ETH) came in at $36,602 and $1,451, respectively.
-In terms of respondents' favorite altcoins, the most commonly cited altcoins were ether (ETH), polkadot (DOT), chainlink (LINK), monero (XMR), and XRP (XRP).
-When asked what DeFi token participants owned, most listed uniswap (UNI), chainlink (LINK), yearn.finance (YFI), kava.io (KAVA), and kyber network (KNC). When asked about their usage of liquidity pools and decentralized exchanges (DEX), 93% and 76% of respondents indicated that they had not borrowed from or lent to a DeFi liquidity pool, respectively, and their DEX usage was virtually nil.
Graphs to illustrate the current and future crypto sentiment.
Most popular Alt-Coins
What outlets do you use when deciding to trade cryptocurrencies.
What advances are you most excited for next year.
Price target for 2021
THE RISE OF DEFI & STABLECOINS
Of the innovations, breakthroughs, and trends that have come to market this year, the rise of decentralized finance (DeFi) and stablecoins stands out. On January 1st, 2020, the total value locked (TVL) in DeFi applications stood at $700M. In early May, hype surrounding “yield farming” began to attract new capital to the ecosystem and subsequently ignited what many would call “a DeFi craze,” causing TVL to climb to an all-time high of $14B on November 13th, 2020. Although TVL stands at a respectable $13.6B as of November 16th, 2020, Kraken Intelligence asked participants an array of questions to better measure the degree of interest and adoption in DeFi. To ascertain whether this year’s surge in interest was merely hype, survey respondents were first asked, “Do you own any DeFi tokens?” Only 46% of respondents said “Yes.” When asked which assets respondents owned, the most commonly cited tokens included uniswap (UNI), chainlink (LINK), yearn.finance (YFI), kava.io (KAVA), synthetix (SNX), and maker (MKR). Respondents provided 2.7 tokens on average and tokens with fewer than 10 mentions were excluded.
Conclusion
Net-net, the results of Kraken Intelligence’s 2H2020 Sentiment Survey suggests that market
participants remain optimistic for the year ahead and have a multitude of advances to look
forward to, especially as it relates to greater adoption by institutions & corporates and the
rise of DeFi. Our survey results also show that market participants are just as excited about
the development of altcoins as they are for bitcoin – especially as it relates to ethereum,
polkadot, and DeFi. Assuming the cryptoasset market stays the course, suffice to say that
2021 could be the biggest year for the industry since its birth. However, our findings do
indicate that market participants will likely continue to remain concerned over the lingering
possibility of unfavorable regulation and/or hacks, scams, and thefts weighing on industry
development and acceptance. Not to mention, participants appear to remain on edge
given the state of the global economy and monetary/fiscal policy response. As we all know,
there are no guarantees in crypto and anything can happen. Be that as it may, Kraken
Intelligence is excited for what’s to come and we hope you are too.