Investors remain undaunted by crypto volatility

More than half of financial professions anticipate cryptocurrency valuations will rise over the next 12 months, according to a new report published today.

The results from global finserv communications firm Citigate Dewe Rogerson also found that 32 per cent of those interviewed believe there will be a dramatic increase in valuations, with a further 18 per cent only expecting a slight rise. Less than one in three investors (28 per cent) think there will be a significant fall before 2021.

It should however be noted that the data set was by no means encompassing, with just 146 investors in cryptocurrencies interviewed. Only 104 of these interviewees still owned some crypto-currencies at the time of consultation.

“Many crypto currencies have seen a huge increase in valuations, but also exceptional levels of volatility.  Crypto-currency millionaires have been created, but depending on when they invested, many other investors have lost money,” said Citigate executive director Phil Anderson.

“However, despite the significant levels of volatility and price fluctuations, our research reveals many investors and financial professionals remain optimistic about the future for crypto currencies.

“At the start of the year, the market capitalisation for crypto-currencies was around $800bn, but by 2021 over half of the financial professionals we interviewed expect it to be over $1trn, while 15 per cent anticipate it to be more than $2trn.”

19 per cent of investors interviewed think the market will shrink, with the market cap falling below $800bn by 2023.

In recent weeks the UK has seen some comment from government regarding crypto regulation, with Bank of England governor Mark Carney suggesting that “the time has come” to hold the crypto-asset ecosystem to account. According to this latest report, 62 per cent of financiers are expecting a dramatic increase in the level of crypto regulation over the next two years.

This is also thought to have a positive effect on the popularity of cryptocurrencies, with 44 per cent of investors expecting an increase in the level of trading and investing in crypto should more regulation be introduced. In fact, 54 per cent think there will be an increase in cryptocurrencies being used as part of essential fundraising, and 50 per cent anticipate a rise in using them to pay suppliers.

Anderson added, “Whatever the future holds for the cryptocurrency market, one thing is certain – it will continue to attract billions of dollars, dominate the headlines and fuel heated debate about what is likely to happen”.