Nearly one-third (30 per cent) of investors will not invest in cryptocurrency because they feel they have ‘missed the boat’, according to a major new research study prepared by the Parliament Street think tank.
The new report, entitled ‘The Great Cryptocurrency Report’ includes polling of 2,000 UK savers by independent survey company Censuswide about their investment plans and habits for 2021.
Will bitcoin go to £50,000?
Despite this, 31 per cent of investors admitted that they expect the price of Bitcoin to hit a £50,000 valuation this year – which would be an increase of nearly 40 per cent compared to what it is now (approximately £35,000 at the time of writing). One in five (18 per cent) even agreed that they expect the price of Bitcoin to hit a £100,000 valuation this year.
Interestingly, one quarter (25 per cent) of all investors surveyed, revealed that they would have made over £1 million profit, had they moved all of their assets into Bitcoin at the start of 2020.
Additionally, according to the data, 37 per cent of investors feel that ‘traditional’ assets, such as stocks and shares, are too risky to invest in right now due to the economic downturn caused by Covid-19 – a travesty which has only benefitted cryptocurrency due to its disassociation with fiat systems of currency.
Many investors see Bitcoin as “an increasingly legitimate option”
As a result, cryptocurrency, and especially Bitcoin, has become an increasingly legitimate option as an investment asset, with 29 per cent revealing that they would never have considered investing in cryptocurrency before the most recent Bitcoin bull run, but they are now.
Bitcoin has also been buoyed by other external events, such as Elon Musk and Tesla’s endorsement of the digital currency – which saw its value surge. Twenty-four per cent of respondents to ITI Capital’s survey also revealed that the Elon Musk endorsement has given them more confidence to invest in cryptocurrency.
However, not all consumers are convinced by the recent Bitcoin bull run – a significant 55 per cent of respondents revealed that they have no plans at all to invest in cryptocurrency this year. Additionally, 52 per cent admitted that they are still more likely to invest money into traditional assets such as gold, stocks or shares, than into cryptocurrency.
Cryptocurrency expert Stephen Kelso, Head of Capital Markets at ITI Capital, said: “Many traditional investors are still cautious of cryptocurrency’s volatility and have been cautious about adding it to their investment portfolios. The nomenclature ‘crypto currency’ has deterred many who have perceived it to be anti-establishment rather than as the increasingly relevant store of value against the rapidly accelerating debasement of fiat currencies.”
Retail investors are leading institutional adoption
Gold became accessible to institutional investors via futures in 1976 and directly accessible to retail investors in 2003 with the first ETF. These are relatively short time-frames and Bitcoin is simply an evolution of the market’s toolbox to access a scarcity asset and protect portfolios. Bitcoin is the world’s first investment megatrend where retail investors have led institutional adoption and equity markets have taught institutions over the last year that they can no longer ignore the influence of retail platforms.
“This digital asset market ‘bull run’ is different from the previous crypto peak back in Dec 2017 because its price has this time been driven by a confluence of factors, including the rate of change of central bank balance-sheet expansions and improved information and understanding of macro conditions and how market forces are changing after a 37 year bull-market in bonds,” Kelso added. “The biggest change however is that now institutional investors, gatekeepers and corporate CFOs now need to be able to point to the most fiduciary-responsible way to access Bitcoin.”
Bitcoin’s decentralised structure makes it more readily accessible to investors without dependence on intermediary administrators and custodians. This is an attractive proposition to billions of investors around the world who do not benefit from the same confidence in the structure of financial markets as we can assume in the UK.
“We observe that these dynamics are an extension of the emerging markets investment phenomenon that has driven markets since EM GDP surpassed that of developed markets in 2007.,” Kelso concludes. “This is why we expect interest in digital currencies to continue its upward trajectory as more investors look to diversify their portfolios.”