Gone are the days when one income stream was considered enough to set us up for a prosperous future, and today, there’s a greater focus than ever on creating multiple streams, with stocks and shares often playing a central role in generating long-term profits. Whether you’re planning an early retirement or simply looking to ensure your family are provided for later on in life, building an investment portfolio is a great way to grow your wealth if you’re prepared to grow the long game.
But while traditional stocks and shares can still offer some excellent opportunities for those prepared to play the long game, cryptocurrencies like Bitcoin and ‘alt-coins’ like Ether could be the way to go if you’re hoping to make some larger gains over the coming year.
According to a global survey, Bitcoin, other cryptocurrencies and NFTs (non-fungible tokens) are more trusted than stocks to give investors better returns in 2022, with a Linkedin poll of almost 6,000 individuals since the beginning of the new year revealing that crypto is set to remain king this year.
In fact, 30% of respondents believe that ‘another cryptocurrency’ other than Bitcoin will yield the best results, while 25% say Bitcoin and NFTs will be the best bets – with just 20% believing that stocks will outperform them.
This new-found faith in cryptocurrencies to turn a profit has come as trading platforms and apps like Bitcoin System (https://bitcoinsystem.app/) continue to report a record number of new sign-ups from those looking to begin their trading journeys – and 2022 could be about to see the statistics surge even more dramatically than they did in 2021.
Nigel Green, founder and CEO of deVere Group – one of the world’s largest independent financial advisory, asset management and fintech organisations – was responsible for conducting the survey, and says the results are ‘surprising’. In fact, like the many others who were monitoring the poll as it gives an indication of investor sentiment for 2022, he says he was ‘taken aback’ by the results.
“Stocks, which have always traditionally made up the bulk of successful investors’ portfolios, are falling out of favour, it seems, as a way to create and build wealth, with digital assets taking over.
“Also, it’s surprising that it’s believed by investors that ‘other’ cryptocurrencies – and not the headline-grabbing, dominant Bitcoin – will out-run other asset classes this year in terms of returns.”
The deVere boss says there could be three key explanations for the findings.
“First, investors are predicting that the markets in 2022 will perform in a similar way to 2021. That’s to say that cryptocurrencies, even despite the slump in December, had a remarkable year.
“Bitcoin ended the year up almost 65%, meanwhile, the S&P500 – the benchmark index of the world’s largest economy – managed around 28%, and gold was down around 7%.”
“However, past performance is no guarantee of future returns, of course.”
He continues: “Second, rising prices as supply chain bottlenecks and a shortage of qualified workers continues to push inflation, which is a major concern for global investors as their spending power is being eroded.
“Bitcoin and other digital currencies are widely regarded as a shield against inflation mainly because of its limited supply, which is not influenced by its price.”
“And third, critically, investors are increasingly confident that digital currencies are the inevitable future of money. In our increasingly tech-driven, globalised world, it makes sense to hold digital, borderless, decentralised currencies and/or other digital assets, such as NFTs.”
According to Green, we could be about to see Bitcoin dethroned in 2022 as the world’s largest and leading cryptocurrency, with the likes of Ether already hot on its heels. He believes that the original might be pushed down the ranking below ‘another cryptocurrency’ due to growing investor insight into the crypto market.
“More and more people understand the intricacies of crypto,” he notes. “I think that when the respondents cited that they believe ‘another cryptocurrency’ would produce better results in 2022 over Bitcoin, they were probably thinking of its main rival, Ethereum.
“Ether has a higher level of real-use potential as Ethereum – the platform on which it is the native cryptocurrency – is the most in-demand development platform for smart contracts, thereby highlighting that network’s value not only as a platform for developers but as a worldwide financial utility.”
He continues: “There’s also massive enthusiasm for the game-changing transition to ETH 2.0, which makes the Ethereum network considerably more scalable, sustainable and secure. These upgrades represent a major boost not just for Ethereum but for blockchain technology itself.”
The survey also suggests that NFTs are being increasingly perceived as a future-proof asset class. NFTs are digital collectibles that are encoded onto a blockchain – the same technology on which cryptocurrencies run – creating a unique digital watermark showing ownership and the digital rights to that collectible.
Over the last year many major global sports franchises, fashion brands and household-name artists and musicians have launched NFTs.
A long-time and high-profile tech advocate, Nigel Green reaffirms that portfolio diversification “remains the best way for an investor to seize opportunities and mitigate risks.”
There’s no denying that the poll has proved revealing, and investors across the globe are watching on with excitement to see the year unfold.
“This poll may be just a snapshot of sentiment, but it does signal that investors are ready to embrace future-focused digital assets that they believe will continue to outperform other assets in 2022,” says Green.
Whether or not you agree, one thing remains certain and shouldn’t be ignored: cryptocurrencies are here to stay. And as they continue to grow and offer greater usability than ever before, those who refuse to embrace it may well soon find that they are left behind.
Disclaimer: Investing money carries risk, do so at your own risk and we advise people to never invest more money than they can afford to lose and to seek professional advice before doing so.