11.22.2017
By John D'Antona

Bitcoin as Safe Haven?

The recent craze around cybercurrency bitcoin and others has gotten plenty of news recently and a new survey sheds some light on what potentially could be the newest asset class.

Triad Securities, in cooperation with DataTrek, released the results to a new survey conducted by the pair from November 6, 2017 to November 13, 2017. The results were shared with Traders Magazine.

Among the most interesting tidbits the survey:

In answering the question: Where is bitcoin going? Thirty-nine percent said the current environment was a bubble and it must crash. Twenty-seven percent said bitcoin would continue to rise – albeit at a slower pace. Sixteen percent said bitcoin’s value would double in the next six months or sooner.

“We were surprised the bubble response was less than 40% given widespread commentary in that direction and the age/experience of the respondents,” said DataTrek analysts. “By age, at least, our survey takers has seen their fair share of bubbles. We were ready to see +70% responses indicate bitcoin’s price is unsustainable. Less than 40% is, well, remarkable.”

Also of keen interest was the answer to the question of “would you ever see bitcoin as a safe haven similar to gold?” Almost 41% (40.7%) answered “yes” while nearly 43% (42.9%) said “no.” The balance had no opinion on the matter.

“This may be the most surprising finding of the survey,” DataTrek analyst said. “Even with widely reported wallet hacks and other systematic challenges, 41% of respondents think bitcoin can become something akin to gold as an investment safe haven.”

When it came to the somewhat controversial topic of Initial Coin Offerings (ICOs), the survey was less surprising. For the question, “Have you ever participated in an Initial Coin Offering or looked at such opportunities?” the responses were as follows:

  • Yes, and I have invested: 7.9%
  • No, but I have considered investing: 29.0%
  • No, and I won’t without more regulation: 14.8%
  • No, and I have not looked at these offerings: 48.3%

DataTrek said that given over a third of respondents have looked at or invested in ICOs the results were “not bad for a fund raising approach that is just a few years old.” Furthermore, they noted it was noteworthy over half might consider ICOs if/when the regulatory framework improves.

So, how do investors who look at ICOs assess these opportunities?

They look as cybercurrency founders/key employees as the top metric, followed by total addressable market, and lastly sector addressed. Of less importance were token type, deal pricing and time to market.

“There were no surprise here,” DataTrek began, ‘with ICO investors looking at exactly the same issues as venture capitalists.”

Lastly on the topic of ICOs, Triad asked,”What is your level of confidence in current bitcoin custodial offerings?”

Respondents answered:

  • High: 9.1%
  • Medium: 29.7%
  • Low: 25.9%
  • Don’t know/no opinion: 30.0%
  • I prefer traditional custodians: 5.4%

DataTrek said this was and is a critical issue for institutional investors. In order for crypto currencies to achieve true “asset class” status, investor confidence in custodial solutions has to improve.

Survey respondents included the buy-side (51.3%), sell side (10.2%), service providers (8.9%) and others (29.6%).  According to DataTrek, most respondents were money managers or RIAs/Wealth Advisors; 51% are over 45 years old, and 79% are over 35 years old; less than 5% work in the crypto currency industry.

There were 317 responses in total.

The full survey and its results are available from Triad Securities or DataTrek.

 

 

 

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