Investment Outlook Grows While Education Remains Limited
Cryptocurrency–A new survey conducted by The Harris Poll has found that cryptocurrency represents a decent portion of the expected investment by Americans for 2019. Despite the continued decline in Bitcoin price and overall valuation for the crypto markets, outlook for future investment still remains strong as more Americans are planning to get involved in the coming year.
American Investors Looking to Cryptocurrency in 2019
Traditional stocks, bonds and real estate still hold the lion’s share of market interest, but perception is growing among U.S. investors that cryptocurrency might be the next big asset class to take part in, particularly to a degree that mitigates overall portfolio risk while still gaining exposure to the upside. Commissioned on behalf of the American Institute of CPAs (AICPA), The Harris Poll survey found that among the 35 percent of Americans who classify themselves as current investors or plan to invest in 2019, cryptocurrency will make up 5 percent of their overall investment. To put that number into perspective Exchange Traded-Funds (ETFs), which have dominated cryptocurrency headlines following the back and forth process through the U.S. Securities & Exchange Commission, constitute 8 percent of projected investment funds. With the SEC delaying decision on VanEck’s bid to form a Bitcoin ETF to the end of September, it’s possible there will be a crossover of the two investment classes by the time 2019 rolls around.
In addition to judging investment interest into cryptocurrency, the survey sought to gauge education and understanding of the industry within America’s active investors. While the numbers were in line with other reports of lower-than-desired education levels, the poll reports just under 50 percent of respondents had little to no understanding of cryptocurrency–a sign of the times that the industry still has a long way to go before reaching market saturation and greater adoption. In a statement addressing The Harris Poll findings, the AICPA remarked upon the level of familiarity exhibited by American adults towards cryptocurrency, despite the promising numbers for future investment,
“Cryptocurrency appears to be foreign to many investors. The survey found that nearly half of U.S. adults (48 percent) are not familiar with Bitcoin, Ethereum, or Litecoin.”
The poll also found that current investors into cryptocurrency and those who were familiar with the industry held disagreeing opinions over the future of the market, an understandable sentiment given the volatility experienced throughout 2018. Among respondents who fit this criteria, 24 percent expected cryptocurrency to continue to appreciate in price, despite the current bear trend, while 29 percent reported that the market was in for further decline. Respondents also identified market volatility, with 35 percent believing that the price would continue to fluctuate wildly, and only 12 percent reporting that prices would stay the same.
Reflecting the balanced portfolio approach of polled investors, which weighed cryptocurrency as only a small, but risky portion of their overall investment, the AICPA report cautioned over the risks associated with crypto while taking a long-term approach on the market,
“Before Americans invest their hard-earned money, it is important they take control of their financial future and do some research … A well-researched and properly diversified portfolio that matches an investors risk tolerance will give confidence to stay focused on long-term strategy and protect from the temptation to sell during short-term price swings.”
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