Bitcoin miners are seeing gold despite the recent decline in the cryptocurrency.
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- A new study of 30,000 Americans shows that 50% consider cryptocurrencies a safe investment.
- The survey also found that 57% of investors believe companies should accept crypto as a means of payment.
- Although 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 market cap of $ 1 trillion on Friday has increased buzz for cryptocurrencies. Debates over whether this is worth investing in have flourished among investors, analysts, and the public.
Although critics argue against the legitimacy of these assets, a new study shows that cryptocurrencies are considered a safe investment by 50% of Americans. In addition, 41% of respondents indicated that investing in stock markets and cryptocurrencies are equally risky investments.
The study, conducted by Piplsay, a global consumer research platform, asked over 30,000 people about their views on digital currencies in February.
“The Crypto Bull Run caught the attention of millions of people who had never considered digital currencies like Bitcoin as an alternative asset before,” said Pavel Matveev, CEO of Wirex, a digital payments platform. “Bitcoin and other currencies are said to have various uses, not the least of which is easy exchange, purchase and liquidity.”
The survey also found that 57% of Americans believe large companies should accept cryptocurrencies as a means of payment. In a separate poll of 1,050 Americans conducted by DealAid, 50% of investors said they would be willing to pay for products with Bitcoin.
Some companies have already taken steps this year to accept cryptocurrency as a means of payment. PayPal announced in October 2020 that it would enable the use of cryptocurrencies starting this year, while Tesla announced in January that Bitcoin would be accepted as a means of payment. Investment banks JP Morgan and Morgan Stanley have also expressed an interest in viewing cryptocurrency as a means of payment.
However, critics are quick to argue that the volatility of cryptocurrencies makes them a 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 as the price of the bitcoin dollar went from $ 10,000 to $ 53,000 in those four and a half months. Dollar has risen, “said Robert Minter, director of investment strategy, Aberdeen Standard Investments. “This type of volatility is inappropriate for transactions in an economy.”
Bitcoin has skyrocketed in the past few days, up 60% this month alone. Ethereum, the second largest cryptocurrency by market value, also rose to record highs on Thursday. Even Dogecoin, a cryptocurrency that started out as a joke, has grown in popularity in recent weeks.
“Bitcoin’s $ 1 trillion market cap shows 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 Bitcoin to be just the first of many $ 1 market caps that we will see in the blockchain economy.”
Enthusiasts argue that Bitcoin may only exist as a form of value similar to “digital gold” while other forms of digital currency will emerge as a means of payment.
Mike Venuto told insiders that he doubted “we will ever buy coffee with bitcoin”.
“This excitement obscures the reality of Bitcoin’s original decentralization thesis by replacing the trusted third party and banking the non-banks,” said Venuto, who manages an ETF of around $ 1 billion. “The focus now seems to be on the argument of the store of value from the limited supply.”