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- A research reported published by the Economist Intelligence Unit stated that lack of knowledge for investing in cryptocurrency was a huge barrier among the respondents
- Security concerns, data privacy and unproven technology were among the other barriers which prevented investors from taking the plunge
- Retail and institutional investors continue their search for an avenue that provides capital appreciation and portfolio diversification benefits
Cryptocurrencies function on the blockchain network and the use of distributed ledger technology. The modus operandi of digital currencies requires a certain degree of knowledge to be learnt in detail. Hence, it prevents small retail investors from making a move as they are still unaware of what lies ahead. However, the Covid-19 pandemic has made a lot of them to dwell over their investment portfolios and how to reap benefits of diversification and capital appreciation via the latest asset class.
Survey respondents eager to invest in cryptocurrency
A survey conducted by the Economist Intelligence Unit concluded that 51% of the respondents did lack knowledge of how the currencies function in the blockchain network. A majority of them obliged that small amounts were invested after some friends or relatives had made the initial move. Even institutional investors feel that cryptocurrencies provide the much needed capital appreciation within a short time frame and help diversification on investment corpus.
The managing director and global head of digital assets at Goldman Sachs, Mathew McDermott, has said that low interest rates and the huge quantity of stimulus packages offered is the correct time for crypto companies to cash in and increase their user base. Citizens from France, the US, the UK, Brazil, Vietnam and Turkey, to name a few under the survey conducted, replied in the affirmative that they made some sort of digital payments over the previous year.
A lot of grey areas to be covered
Given its functionality, it is unique and very few understand the basic concept of cryptocurrencies like Bitcoin, Ethereum, Ripple, etc. Hence, it is very easy for scammers to invade the investors’ wealth and steal their hard earned money. There are potential security issues being reported on a daily basis and are yet to be resolved. 29% of the respondents were clueless as to where to buy cryptocurrencies and were apprehensive of their data privacy.
A lot of support has been received from institutions like Goldman Sachs, Morgan Stanley and institutional investors like MicroStrategy, BNY Mellon and even corporations like PayPal and Tesla. They are aware of their investment decision making process as the integration of cryptocurrencies within the same is underway.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
