Survey shows Bitcoin and crypto will provide better returns than stocks in 2022
A global poll has shown that Bitcoin, other cryptocurrencies and NFTs are more trusted than stocks to provide investors with better returns in 2022.
Around 6,000 people on LinkedIn have taken part in the survey since the start of the year, which is monitored by over 146,600. The results show that 30% of respondents believe ‘another cryptocurrency’ (other than Bitcoin) will give the best results; 25% say Bitcoin and NFTs (non-fungible tokens); and 20% believe stocks will outperform the others.
I must say, I was surprised by the findings. Stocks have always made up the bulk of successful investors’ portfolios, yet now appear to be falling out of favour as a way in which to generate and accumulate wealth, with digital assets coming to the fore.
In addition, it’s somewhat startling that investors believe ‘other’ cryptocurrencies – not the world’s largest, Bitcoin – will outperform other asset classes in 2022 in terms of returns.
I believe there are three key reasons for these latest findings.
First, investors predict the markets this year will perform in a similar way to last. Despite the December slump, digital currencies had a remarkable year. Bitcoin ended 2021 almost 65% up, whilst the S&P500 managed around 28%, and gold was down around 7%. That said, past performance is, of course, no guarantee of future returns.
Second, increasing prices as supply chain issues and staff shortages continue to drive inflation, is a major worry for global investors as their spending power is being battered. Bitcoin and other cryptocurrencies are widely viewed as a shield against inflation, predominantly due to its limited supply, which is not impacted by its price.
Finally, third, investor confidence is mounting that cryptocurrencies are the inevitable future of money. It just makes sense to have digital, borderless, decentralised currencies and/or other digital assets, such as NFTs, in our increasingly tech-driven, globalised world.
Looking back at the results from this poll, Bitcoin may have slid down the ranking below ‘another cryptocurrency’ because of growing investor insight into the crypto market. More and more people now understand crypto a lot better, and I think that when they referred to ‘another cryptocurrency’ providing better results than Bitcoin this year, they were likely thinking of its main rival, Ethereum.
Ether has higher real-use potential because Ethereum – the platform on which it is the native cryptocurrency – is the most in-demand development platform for smart contracts. This therefore underscores the network’s value as a global financial utility, not just a developer platform.
Moreover, there was a lot of hype surrounding the move to ETH 2.0, making the Ethereum network more scalable, sustainable and secure.
The poll results also indicate NFTS are being increasingly seen as a future-proof asset class. These digital collectibles are encoded onto a blockchain, creating a unique digital watermark showing ownership and the digital rights to that collectible. Over the past year, a large number of major global sports franchises, fashion brands and household-name artists and musicians have launched NFTS.
This poll may well just provide a snapshot of sentiment, but it does show investors are ready to embrace digital assets that they believe will continue to outperform others.