A global study revealed that Bitcoin, other cryptocurrencies, and NFTS are more trusted than stocks to give investors better returns in 2022.
The survey of nearly 6,000 individuals on LinkedIn – and followed by more than 146,600 – since the start of the new year found that 30% of respondents believe that “another cryptocurrency” (other than Bitcoin) will yield the best results; 25% say Bitcoin and NFTs (non-fungible tokens); And 20% believe that the stock will outperform the others.
The results were “surprising,” says Nigel Green, founder and CEO of deVere Group, one of the world’s largest independent financial advisory, asset management and fintech firms, who conducted the survey on the business networking platform.
Like many others who have been watching the survey as it gives an indication of investor sentiment for 2022, he says he was “surprised” by the results.
“Stocks, which have traditionally made up the bulk of the portfolios of successful investors, are seemingly becoming unpopular as a way to create and build wealth, with digital assets taking over.
“It is also surprising that investors believe that “other” cryptocurrencies – not the dominant Bitcoin – will outperform other asset classes this year in terms of returns.
The deVere chief says there could be three main explanations for the results.
First, investors expect the markets to perform in 2022 to be similar to that of 2021. This means that cryptocurrencies, despite the December recession, had a great year.
Bitcoin finished the year up about 65%, meanwhile, the S&P500 – the benchmark for the world’s largest economy – managed about 28%, and gold was down about 7%.
“However, past performance is not a guarantee of future returns, of course.”
And he continues: Second, continued price hikes with supply chain bottlenecks and a shortage of qualified labor driving inflation, a major concern for global investors as their purchasing power is eroded.
“Bitcoin and other digital currencies are widely seen as a shield against inflation mainly due to limited supply, which is not affected by their price.”
And third, and crucially, investors are growing more confident that digital currencies are the inevitable future of money. In our increasingly globalized and technology-driven world, it makes sense to hold borderless and decentralized digital currencies and/or other digital assets, such as NFTs.
Nigel Green says that Bitcoin may have been dragged down the rankings to ‘another cryptocurrency’ due to investors’ increasing outlook on the crypto market.
He notes that “more and more people understand the intricacies of cryptography”. “I think when respondents mentioned that they believe that “another cryptocurrency” will do better in 2022 over Bitcoin, they were probably considering its main competitor, Ethereum.
“Ether has a higher level of real-world potential as Ethereum – the platform on which the original cryptocurrency is – is the most in-demand development platform for smart contracts, highlighting the value of that network not only as a platform for developers but also as a global financial facility.
He continues: “There is also great enthusiasm for the game-changing transition to ETH 2.0, which will make the Ethereum network more scalable, sustainable and secure. These upgrades represent a huge boost not just for Ethereum but for the blockchain technology itself.”
The survey also indicates that NFTs are increasingly viewed as a proven asset class for the future. NFTs are digital holdings that are encoded into the blockchain – the same technology that cryptocurrencies run on – creating a unique digital watermark that shows ownership and digital rights to the collection.
Over the past year, several major global sports franchises, fashion brands, family name artists and musicians have launched NFTS.
Long-time technology advocate and prominent figure Nigel Green asserts that portfolio diversification “remains the best way for an investor to seize opportunities and mitigate risk.”
It concludes: “This survey is perhaps just a glimpse into sentiment, but it does indicate that investors are ready to embrace the future-focused digital assets that they believe will continue to outperform other assets in 2022.”