Bitcoin (BTC) will most likely perform better than the S&P 500 stock index, believe nearly half of the 350 financial professionals polled by Chainalysis.
Volatility Undermines Gains Potential
Despite short-term volatility, Bitcoin will be the most promising asset class in the coming year, believe financial experts in a Chainalysis poll. The opinions belong to professionals such as executives from banks, credit unions, financial services providers, and regulatory agencies.
Of the 350 experts polled, 168 (48%) see BTC as an asset class to outperform all others. About a third bet on S&P still rising, while bonds and real estate are the bet of respectively 13 and 5% of respondents.
“Many finance professionals understand that cryptocurrency presents a massive opportunity, yet institutions are hesitant to enter the market due to perceived risk and some don’t even realize the exposure that they already have to cryptocurrency,” said Michael Gronager, Co-Founder and CEO at Chainalysis.
In 2019, bitcoin easily outperformed stock indexes, by moving up from the $4,000 range to current levels around $8,800. However, the performance is only a small piece of the asset’s history, and BTC has also had disastrous years, lagging behind all asset classes. On Wednesday, BTC traded at $8,812.65, on volumes of $19 billion in 24 hours.
The S&P 500 started the year around 2,500 points, climbing above the 3,000 point range, among fears a stock sell-off may happen at any moment. So far, there is no consensus on what would happen to BTC prices in case of a stock market downturn.
Illegal Transactions and Regulations Prevent Bitcoin Growth
Mainstream investors are still highly aware of the potential for BTC and other crypto assets to facilitate illegal transactions. More than 40% of respondents stated they were not making bigger forays into the crypto space due to worries about legal issues.
Around 44% of managers responded they would grow more interested in digital coins, if their clients demanded it. 20% believe owning crypto assets would future-proof their holdings.
Chainalysis also discovered that 70% of the managers believe there will be a new, global digital currency in the next 5-10 years. Of those that expect the scenario, a third believe the US will be behind the new asset, while 21% believe China will control the new coin.
Chainalysis has taken up the task of blockchain tracking, to achieve a new standard of transparency that may make institutional investors see digital coins as a worthy investment. On-chain transactions may start to give transparent information about the origin of funds.
What do you think of BTC’s potential in 2020? Share your thoughts in the comments section below!
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