Investors swerve bitcoin as they look to ride out market volatility
Retail investors are turning away from bitcoin in favour of mainstream assets in a bid to avoid the effects of wider market volatility.
Investors’ optimism of the digital asset is cooling, with only 54 per cent expecting bitcoin’s price to rise over the next 12 months, down from 65 per cent last quarter, according to the latest survey from Finimize.
Planned investment into crypto assets has also declined, falling from 29 per cent to 20 per cent, suggesting investors no longer see an opportunity to grow wealth through the digital asset.
The lull in confidence comes as the price of bitcoin plummeted 18.7 per cent since the start of the year, trading at $71,070.5 (£53,072.9).
Bitcoin fell to its lowest levels in 15 years in late February amid a sweeping tech sell-off and Trump’s nomination of a hawkish Fed chair, Kevin Warsh.
The price dropped to levels that “many thought impossible”, plunging well below the expected price of $70,000, which is the average cost of mining Bitcoin.
The drop also followed months of surging bitcoin prices, which reached an all-time high of $122,200 in October, as investors were encouraged by Trump’s involvement in the sector.
But among those who hold the asset, 67 per cent viewed it as a long term investment, with just five per cent selling their holdings entirely.
Carl Hazeley, CEO of Finimize, said: “Optimism about bitcoin’s price has cooled this quarter, but the investors who already hold it are largely staying put.
“Many expect volatility and see it as a long-term investment, and a significant minority are actively buying more. What we’re seeing is a shift from hype-driven enthusiasm to a more committed base of holders.”
Mainstream holdings
Investors are also reaffirming their stance in mainstream markets amid wider market volatility, in particular piling cash into ETFs.
Over 60 per cent planned to put excess capital into ETFs, up from 58 per cent the last quarter, while others eyed commodities.
Meanwhile those who chose to keep hold of their cash savings fell from 29 per cent to 24 per cent.
The increase in mainstream assets comes as more retail investors expect global markets to be higher in the next year, climbing from 61 per cent to 68 per cent.
Nine out of ten invest the same amount or more over the next three months, while the share planning to reduce investment activity dropped from 13 per cent to nine per cent.
Reassessing the US
While the US continues to dominate global investment preference, ranking ahead of Asia, Europe and the UK, recent political and economic developments prompted investors to reconsider their exposure.
Over 30 per cent confirmed they were reducing US allocations in the face of the Iranian conflict, AI fears and surging oil prices.
But six in ten said they were either maintaining their exposure or shifting to differing sectors within the region, suggesting the market is still central to investor’s portfolios.
Hazeley said: “Retail investors aren’t retreating from volatility. They’re moving into mainstream assets like equities, ETFs and commodities.
“What we’re seeing is consistent with our understanding of how retail investors think and act – they’re sophisticated, and are focused on building long-term portfolios rather than chasing short-term trades.”
Among individual picks, Nvidia and Alphabet remained the most popular, closely followed by Microsoft, Apple and Amazon.