Bitcoin Outpaces Dollar as Preferred Investment Choice
Bloomberg analysts conducted a Markets Live Pulse survey among their subscribers. The aim of the study was to determine the investment preferences of financial market participants.
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Nearly 700 readers, meeting the criteria for experienced investors (size of investments, annual income, duration of financial market involvement), participated in the survey. The survey was triggered by concerns about a potential default if the U.S. government fails to pay interest on its treasury bills.
It's important to note that the current deposit rate stands at 5.2%, the highest level in the last decade. Hence, many financial companies are readily investing in 10-year U.S. bonds. For instance, Hong Kong's Tether Limited followed this approach and reaped substantial profits.
But the question remains, how long can the government sustain interest in its treasury bills while consistently paying out interest? Media outlets are increasingly publishing analytical articles, arguing that this scheme of curbing inflation increasingly resembles a bubble ready to burst at any moment. If this were to happen, the American “banking collapse” would seem like a mild June shower compared to the torrential downpour that would undoubtedly be a national default.
Bloomberg's key takeaways:
- Over half of the respondents (51%) indicated that they hedge their risks by investing in gold bullion, a strategy agreed upon by both professional and retail investors.
- Around 15% of the respondents use the purchase of government bonds as a hedging strategy.
- Bitcoin is the investment choice for 8% of venture and 12% of retail depositors.
- Fiat currencies came in fourth, with traditionally popular currencies such as the Swiss franc and the Japanese yen collectively matching the 10% share of the American dollar.
- Real estate and land plots, along with stocks of tech companies, have almost entirely lost their investment appeal, barely reaching 5%.
Markets Live Pulse survey. Source: Bloomberg
Taking into account that payments on state obligations are already experiencing delays, a part of retail respondents are ready to redirect their capital into cryptocurrencies. They explain this choice by stating that hedging in precious metals is costly, and BTC, in their view, presents a more accessible alternative.
Certainly, it is unrealistic to expect digital gold to surpass the real one, primarily because precious metals are immune to volatility and exhibit modest but consistent growth. However, the general trend is leaning more in favor of digital money than fiat currencies. Almost half of the respondents assert that a default would irreparably harm the reputation of the dollar as a global reserve currency, indicating that it's time to seek an alternative to safeguard their capital.
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