“Cryptocurrencies may have yet to shake off their ‘Wild West’ reputation,” said Nauman Anees, CEO of ThinkCoin, in a recent statement.
His statement follows the release of the trading platform’s survey of 1,000 UK adults that found trust to be the biggest barrier to buying crypto (37%), followed by understanding (36%), concern over security (32%) and the unregulated nature of cryptocurrencies (28%).
But the report shows promise for the future of cryptocurrencies as an investment option: 31% believe crypto assets will or would net them sizeable returns, due in no doubt to the cryptorush of 2017. 19% believe that cryptos are the ‘future of investing’ and 13% believe it will eventually replace fiat.
The report further highlighted how few private investors are currently invested in cryptocurrency, some 4% - with only 15% considering crypto investment - and this compared to the 17% currently invested in stocks.
Traditional, low risk, investment tools still remain the firm favourites with some 69% of respondents relying on saving accounts, 44% Cash ISAs and 34% invested through building societies.
While private investors in the UK may still be wary of cryptocurrencies, the world’s latest investment tool has gained strong traction among institutional investors. Goldman Sachs and other investment banks have opened Bitcoin trading desks and other means by which participants can access the market, and exchanges such as the Chicago Mercantile Exchange have seen trading volumes increase on their Bitcoin futures products since launching them late last year.
But scepticism is still rife among the investment banking community, with JPMorgan CEO Jamie Dimon calling Bitcoin a ‘fraud’, and claiming he would fire any employees that traded crypto, largely because “there will be no currency that gets around government controls,” as he told Fortune’s Global Forum.
This all comes at a time when value destabilisation looks set to continue with another Bitcoin price drop forecast as Mt Gox, a defunct exchange, transferring 16,000 tokens – Bitcoin and BitcoinCash - some $140m, to two wallet addresses.
Mt Gox, that once handled 70% of the world’s bitcoin transactions, faced a slow-burn hack that led to 650,000 Bitcoin going missing and leaving 24,000 Bitcoin investors out of pocket. Since then, Mt Gox’s bankruptcy trustee, Nobuaki Kobayashi, a Tokyo lawyer, has proceeded with liquidating the exchange’s remaining assets to pay back creditors.
“This is the first time in three months that Mt Gox has moved any of its assets. The last time it sold off funds, a price shock ensued as the supply of currency in the market increased,” says Nigel Green, CEO of the deVere Group.
“Cryptocurrency volatility should be treated like any financial market turbulence,” says Green, surmising that the investor’s best tool to mitigate potential risks and grasp volatile market opportunity where and when it presents itself, is diversification.
“Cryptocurrency investors should be diversified across the main digital tokens, such as Ethereum and Ripple, and as a part of a wider investment portfolio of assets, sectors and regions,” explains Green.