Monex Group: Virtual Currency Investments Are In The Minority

Japan-based financial service company Monex Group has released the results of its twenty-third Monex Global Investor Survey. In the survey, which was conducted from May 29, 2017, to June 5, 2017, the firm questioned retail investors in the U.S., China (Hong Kong), and Japan about their experiences with virtual currency investments, and found that despite the media hype, the percentage of investors in the U.S. and Hong Kong who have invested in virtual currencies is actually very low. As per the report:

“We asked retail investors about much-talked-about “virtual currency” such as bitcoins. The results showed that the percentage of retail investors actually investing is still low, with only 3% of retail investors in Japan and the U.S., and only 10% of retail investors in China (Hong Kong), answering that they had already invested in virtual currency. Around 20% of retail investors in the U.S. and China (Hong Kong) answered that they were not familiar with virtual currency, setting themselves apart from retail investors in Japan who are mostly familiar with virtual currency even if they have not made any investment.”

Still, Monex Group’s findings aren’t shocking, as there are a number of reasons why virtual currencies investments could be lagging in both regions. First, virtual currencies remain largely unregulated across both surveyed populations, which may potentially discourage trust in the technology. This issue coupled with the learning curve requirement could contribute to the reasons why traditional investors aren’t stepping into the digital world.

Additionally, the technology comes with increased investment risks that aren’t associated with traditional investments, such as hacks, harsh price fluctuations, and ridicule from central banks and fellow investors. Taxation of virtual currencies has also been a huge issue, and despite attempts by regulators to secure a harmonious relationship with the technology, many investors would rather not gamble with worrisome gray areas. Nevertheless, countries mentioned in the survey account for the top three economies in the world and therefore could potentially become the curators of mass adoption of virtual currencies.

The U.S. has always been a hub for traditional investors and a purveyor for technological change and innovation. Thus, it’s only a matter of time before traditional investment platforms integrate virtual currencies. Recently, Boston-based investment service Fidelity announced that customers will soon allow users to view digital currency holdings via digital asset exchange Coinbase.

On the other hand, despite investments being low in the region, virtual currency use within Asia appears to be on the rise. Not only are China and Japan home to some of the world’s busiest exchanges, but also after proclaiming virtual currencies as forms of payment in April, Japan saw a massive increase in its demand by both Chinese and Japanese investors.

It may be some time before virtual currencies become commonplace in the market but their popularity in other countries will most likely rise when more U.S., Chinese, and Japanese investors find them chic.