Despite Volatility, Nearly Half of Financial Professionals Believe Bitcoin Will Outperform S&P 500 Over the Next 12 Months
Nearly 40% of Financial Professionals Identify Inability to Control for Illicit Activity as #1 Factor Holding Them Back From Doing More Work With Cryptocurrency
NEW YORK, Nov. 6, 2019 /PRNewswire/ -- Despite its volatile nature, nearly half of financial professionals believe Bitcoin will be the investment class with the highest growth rate over the next 12 months according to a recent survey conducted by Chainalysis, the blockchain analysis company. Chainalysis polled 350 finance professionals including executives from banks, credit unions, financial services providers, and regulatory agencies at the ACAMS 19th Annual AML & Financial Crime Conference.
Following the 48% of financial professionals that chose Bitcoin, one-third of survey respondents said equities (S&P 500) would be the investment class with the highest year-over-year growth, followed by fixed income (Bloomberg Barclays Bond Index) and the House Pricing Index (HPI) at 13% and 5%, respectively.
The Gap Between Perception and Reality
Despite recognizing the value in cryptocurrency, more than three-fourths (78%) of financial professionals said less than half of their retail clients transact with cryptocurrency businesses. Twenty-eight percent of financial professionals noted that between 1-10% of their customers transact with cryptocurrency businesses while one-third of respondents said that none of their customers are involved at all.
"Many finance professionals understand that cryptocurrency presents a massive opportunity, yet institutions are hesitant to enter the market due to perceived risk and some don't even realize the exposure that they already have to cryptocurrency," said Michael Gronager, Co-Founder and CEO at Chainalysis. "Blockchain analysis can help institutions and exchanges monitor transactions and detect criminal activity. The integration of these tools will allow the financial sector to mitigate existing risk, provide banking services to cryptocurrency businesses, offer new opportunities to clients, and ultimately promote transparency and build trust in blockchains."
Risk Vs. Customer Reward
Nearly 40% of professionals cited the 'inability to control for illicit activity' as the number one thing holding them back from doing more work with cryptocurrency. While many finance professionals recognize the potential for cryptocurrency, 25% said the number one thing holding them back from doing more work with cryptocurrency is that the market opportunity isn't big enough. Lack of executive support (18%) and inability to comply with regulations (18%) were also cited as reasons respondents' firms are not more involved in cryptocurrency activity.
When asked what is or would be the most likely factor to motivate their employer to get more involved with cryptocurrency, almost half (44%) answered client demand. Other motivating aspects include the opportunity to future-proof the institution (20%), the money-making opportunity (18%), and being viewed as a pioneer in a growing industry (18%).
The Future of Digital Currency
Strikingly, Chainalysis's survey found that 70% of financial professionals believe that there will be a global digital currency in the next 5-10 years. More than one-third (37%) believe that the United States will control that currency, followed by 21% who believe that China will control it.
"Our belief in the potential of cryptocurrency was echoed by the number of finance professionals who view Bitcoin as a high-growth asset class and envision a global digital currency in the near future," said Jonathan Levin, Co-Founder and Chief Strategy Officer at Chainalysis. "Financial institutions are a critical component to the cryptocurrency ecosystem. At Chainalysis, we're focused on creating transparency across blockchains to mitigate risk and promote confident engagement in cryptocurrency so institutions can realize the major opportunity available to them."
Survey Methodology
Chainalysis polled finance professionals at the ACAMS 19th Annual AML & Financial Crime Conference in Las Vegas, Nevada on September 24 and 25, 2019. A total of 350 responses were collected from industry professionals including banks, credit unions, financial services providers and regulatory agencies.
About Chainalysis
Chainalysis is the blockchain analysis company. We provide compliance and investigation software to the world's leading banks, businesses, and governments. Our experts in financial crime and economic analysis empower our customers to derive insights they can act on. Backed by Accel, Benchmark, and other leading names in venture capital, Chainalysis builds trust in blockchains. For more information, visit www.chainalysis.com.
SOURCE Chainalysis Inc.
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