Americans are becoming increasingly bullish on cryptocurrency as bitcoin soars to new records
- A new study of 30,000 Americans reveals 50% view cryptocurrencies as safe investments.
- The survey also revealed 57% of investors think companies should accept crypto as payment.
- Though crypto enthusiasts have mixed opinions on whether bitcoin will ultimately serve as a medium of exchange or simply a store of value.
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Bitcoin's record-breaking rally to a $1 trillion market capitalization on Friday has increased the buzz around cryptocurrencies. Debates on whether these are worthy investments have flourished among investors, analysts, and the public.
Despite critics arguing against the legitimacy of these assets, a new study reveals that cryptocurrencies are viewed as safe investments by 50% of Americans. Additionally, 41% of those surveyed said investing in the stock market and cryptocurrencies are equally risky investments.
Conducted by Piplsay, a global consumer research platform, the study surveyed over 30,000 people in February on their views on digital currencies.
"The crypto bull run has seized the attention of millions of people who previously had never considered digital currencies like Bitcoin to be an alternative asset," said Pavel Matveev, CEO of Wirex, a digital payments platform. "Bitcoin and other currencies are intended to have several uses, not least ease of exchange, purchase, and liquidity."
The survey also revealed that 57% of Americans think major companies should start accepting cryptocurrencies as payments. In a separate survey of 1,050 Americans conducted by DealAid, 50% of investors said they would be willing to pay for products using bitcoin.
Some companies this year have already taken steps towards accepting cryptocurrency as a means of payment. PayPal in October 2020 said it will start allowing people to use cryptocurrencies starting this year, while Tesla announced in January it plans to start accepting bitcoin as payment. Investment banks JP Morgan and Morgan Stanley have both also expressed interest in considering cryptocurrency as payment.
Critics however are quick to argue that the volatility of cryptocurrencies makes them poor medium of exchange.
"If you bought a $50,000 Tesla with four bitcoins on October 1st, that purchase now has an opportunity cost of $212,000, because bitcoin's dollar price has risen from $10,000 to $53,000 in those four and a half months," said Robert Minter, Director of Investment Strategy, Aberdeen Standard Investments. "That type of volatility is unsuitable for transacting in an economy."
Bitcoin has skyrocketed in recent days, surging 60% this month alone. Ethereum, the second-largest cryptocurrency by market value, also soared to record highs Thursday. Even dogecoin, a cryptocurrency that began as a joke, has been gaining traction in recent weeks.
"Bitcoin's market cap hitting $1 trillion demonstrates the mainstreaming of cryptocurrency as a store of value," said Adam Liposky, Ecosystem Operations Lead at Pocket Network, a blockchain data ecosystem for Web3 applications. "We expect that Bitcoin is only the first of many $1TR market caps that we'll see in the blockchain economy."
Enthusiasts argue bitcoin may exist solely as a form of value akin to "digital gold," while other forms of digital currencies will emerge as forms of payment.
Mike Venuto told Insider he doubts "we will ever buy coffee with bitcoin."
"This excitement obscures the reality of the original bitcoin thesis of decentralization, replacing the trusted third party and banking the unbanked," Venuto, who manages an approximately $1 billion ETF, said. "The focus now seems to be the store of value argument from the limited supply."
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