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Bitcoin and crypto to give better returns than stocks in 2022

by LLT Editor
13th Jan 22 11:13 am

Bitcoin, other cryptocurrencies and NFTS are more trusted than stocks to give investors better returns in 2022, reveals a global survey.

The poll taken by almost 6,000 individuals on LinkedIn – and tracked by more than 146,600 – since the beginning of the new year finds that 30% of respondents believe that โ€˜another cryptocurrencyโ€™ (other than Bitcoin) will yield the best results; 25% say Bitcoin and NFTs (non-fungible tokens); and 20% believe stocks will outperform the others.

Nigel Green, the founder and CEO of deVere Group, one of the worldโ€™s largest independent financial advisory, asset management and fintech organisations, who ran the survey on the business networking platform says the results were โ€œsurprising.โ€

Like the many others who were monitoring the poll as it gives an indication of investor sentiment for 2022, he says he was โ€œtaken abackโ€ by the results.

โ€œStocks, which have always traditionally made up the bulk of successful investorsโ€™ portfolios, are falling out of favour it seems as a way to create and build wealth, with digital assets taking over.

โ€œAlso, itโ€™s surprising that itโ€™s believed by investors that โ€˜otherโ€™ cryptocurrencies – and not the headline-grabbing, dominant Bitcoin – will out-run other asset class this year in terms of returns.โ€

The deVere boss says there could be three key explanations for the findings.

โ€œFirst, investors are predicting that the markets in 2022 will perform in a similar way to 2021. Thatโ€™s to say that cryptocurrencies, even despite the slump in December, had a remarkable year.

โ€œBitcoin ended the year up almost 65%, meanwhile, the S&P500 – the benchmark index of the worldโ€™s largest economy โ€“ managed around 28%, and gold was down around 7%.โ€

โ€œHowever, past performance isย no guarantee of future returns, of course.โ€

He continues: โ€œSecond, rising prices as supply chain bottlenecks and a shortage of qualified workers continues to push inflation, which is a major concern for global investors as their spending power is being eroded.

โ€œBitcoin and other digital currencies are widely regarded as a shield against inflation mainly because of its limited supply, which is not influenced by its price.โ€

โ€œAnd third, critically, investors are increasingly confident that digital currencies are the inevitable future of money. In our increasingly tech-driven, globalised world, it makes sense to hold digital, borderless, decentralised currencies and/or other digital assets, such as NFTs.

Nigel Green says that Bitcoin might have been pushed down the ranking below โ€˜another cryptocurrencyโ€™ due to growing investor insight into the crypto market.

โ€œMore and more people understand the intricacies of crypto,โ€ he notes. โ€œI think that when the respondents cited that they believe โ€˜another cryptocurrencyโ€™ would produce better results in 2022 over Bitcoin, they were probably thinking of its main rival, Ethereum.

โ€œEther has a higher level of real-use potential as Ethereum โ€“ the platform on which it is the native cryptocurrency โ€“ is the most in-demand development platform for smart contracts, thereby highlighting that networkโ€™s value not only as a platform for developers but as a worldwide financial utility.

He continues: โ€œThereโ€™s also massive enthusiasm for the game-changing transition to ETH 2.0, which makes the Ethereum network considerably more scalable, sustainable and secure. These upgrades represent a major boost not just for Ethereum but for blockchain technology itself.โ€

The survey also suggests that NFTs are being increasingly perceived as a future-proof asset class. NFTs are digital collectibles that are encoded onto a blockchain – the same technology on which cryptocurrencies run – creating a unique digital watermark showing ownership and the digital rights to that collectible.

Over the last year many major global sports franchises, fashion brands and household-name artists and musicians have launched NFTS.

A long-time and high-profile tech advocate, Nigel Green reaffirms that portfolio diversification โ€œremains the best way for an investor to seize opportunities and mitigate risks.โ€

He concludes: โ€œThis poll maybe just a snapshot of sentiment, but it does signal that investors are ready to embrace future-focused digital assets that they believe will continue to outperform other assets in 2022.โ€

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