- The pandemic has made cryptocurrencies more attractive to investors, according to a survey by the Economist Intelligence Unit.
- Despite openness to crypto, the study found that the lack of knowledge of potential investors is the main obstacle to greater adoption.
- Institutional investors surveyed see crypto’s primary role as capital appreciation and asset diversification.
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The pandemic has made cryptocurrencies more attractive, according to a recent survey by the Economist Intelligence Unit. As more people stayed indoors to curb the spread of the virus, they were left with more free time, while also benefiting from several rounds of government stimulus funds.
Data from Economists Intelligence Unit showed that 46% of those surveyed found cryptocurrency duty more compelling due to covid-19.
“It’s a function of continued demand in both retail and institutions,” said Mathew McDermott, managing director and global head of digital assets at Goldman Sachs, in the study.
He added: “Given the huge amount of stimulus that we are seeing in countries due to covid-19 and low interest rates, this is the right place at the right time for companies to offer the opportunity. people to buy, hold and use digital currencies and have digital wallets. “
The first part of the study interviewed 3,053 people in February and March from developed economies – the United States, United Kingdom, France, South Korea, Australia and Singapore – as well as developing countries such as Brazil, Turkey, Vietnam, South Africa and the Philippines.
All of the respondents had purchased a product or service in the past 12 months using some sort of digital payment.
However, despite an openness to digital currencies, the study found that 51% cited lack of knowledge as the main barrier to greater adoption. As a result of this hurdle, there are security concerns at 34% and difficulties in knowing where to buy cryptocurrencies at 29%.
As cryptocurrencies have seen increasing institutional adoption this year, with backing from Tesla, MicroStrategy, BNY Mellon, Pay Pal, and major banks, including Goldman Sachs and Morgan stanley, investors surveyed saw the primary role of cryptocurrencies as capital appreciation and alternative asset diversification.
The second part of the study interviewed 200 institutional investors and corporate treasury managers from February to April. About a third were based in the United States while the rest were spread across Australia, China, France, Germany, Singapore and the United Kingdom.
All respondents were familiar with their organization’s investment decision-making processes.
“Many experts will tell you that bitcoin has a role to play as part of a diverse portfolio,” Henri Arslanian, the crypto leader at PwC, said in the study.
He continued, “Despite the volatility, bitcoin can potentially be a hedge against inflation, against currency devaluation, and that’s something a lot of people are considering.”
Cryptocurrencies have struggled since bitcoin peaked at the time of Coinbase’s listing on April 14. The extreme volatility over the past two weeks has halved Bitcoin’s market cap.
Still, many remain optimistic about the space.
“Our clients want to be exposed to bitcoin and increasingly different cryptocurrencies, like ether,” Goldman Sachs’ McDermott said in the study. “It’s still a very nascent market, but we are looking for different ways to ease clients’ appetites to gain exposure in a regulatory compliant manner.”