Bitcoin’s recent bull run is causing more individual investors to consider buying it – yet many also feel they’ve “missed the boat” due to the cyptocurrency’s huge increase in valuation.
According to research among 2,000 UK consumers, a third of them felt it was too late to invest in bitcoin.
But there is also the perception among the consumers that had they swapped stock and bond investment for bitcoin, they would have become millionaires in 2020.
Parliament Street, a ‘think tank’, found a third of the investors will not invest in cryptocurrency because they feel they have missed the opportunity for return.
Yet the research – which is contained in the ‘The Great Cryptocurrency Report’ into retail investors’ investment plans and habits for 2021 – showed 31% expected the price of bitcoin to hit a £50,000 valuation this year – which would be an increase of nearly 40% from now.
Nearly 40% felt that traditional assets, such as stocks and shares, were too risky to invest in at present due to the economic downturn caused by Covid-19. This is said to have benefitted cryptocurrency due to its “disassociation with fiat systems of currency”, the report said.
However, 55% of respondents said that they have no plans at all to invest in cryptocurrency this year, and a similar amount said they were still more likely to invest money into traditional assets such as gold and equities.
Stephen Kelso, head of capital markets at ITI Capital, commented on the report, saying traditional investors were still cautious of crypto’s volatility – but that bitcoin was attractive to “billions” of investors.
He said bitcoin was 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”.
He added: “Bitcoin’s decentralised structure makes it more readily accessible 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.”
These dynamics are, he said, an extension of the emerging markets investment phenomenon that has driven markets since GDP in emerging economices surpassed that of developed markets in 2007.
“This is why we expect interest in digital currencies to continue its upward trajectory as more investors look to diversify their portfolios.”
© 2021 funds europe