Findings From Crypto Pulse Survey: Is Cryptocurrency Safe?

The Crypto Pulse Survey by Bitstamp revealed that more regulation is welcomed, and most cite risk as the biggest deterrence to crypto adoption. 

A recent global survey by Bitstamp revealed that Singapore investors said that the lack of regulation in the crypto industry is one of the key barriers to cryptocurrency adoption, the highest among the countries polled.

In the poll, 37% of the 1,004 Singapore retail investors aged 16 and above said so, compared to 34% from Hong Kong and Spain, and 32% from Italy. 

Meanwhile, Singapore institutional investors also share the same sentiment that more regulation is needed in the industry, with 32% believing so, the highest in the Asia-Pacific (APAC) region. 

However, 53% of Singapore retail investors cited high risk as the top barrier to crypto adoption.

The Crypto Pulse survey polled 28,000 institutional and retail investors across 23 countries, including Singapore, and asked investors about their knowledge, trust, plans, and attitudes towards crypto. It was conducted from 19 May to 6 June 2022, after the Terra Luna crash. 

Sentiment towards crypto remains largely positive, despite crypto winter

The crypto winter that we’re currently experiencing has seen a small decline in global trust in crypto.

Trust among retail investors has dipped this quarter compared to the previous quarter (65% vs 67%), while there was a similar sentiment among institutional investors this quarter (65% vs 70% in Q1 2022).

Despite that, global sentiments among investors towards cryptocurrency remain largely positive. Many investors are using this to build for the future.

The number of retail investors who are trading or investing in crypto on a daily or weekly basis increased from 56% in Q1 2022 to 60% in Q2 2022. 61% of institutional investors also said that they are more knowledgeable about crypto this quarter compared to 49% who said so in Q1 2022. 

Meanwhile, in the APAC region, which includes Australia, Hong Kong, India, Japan, and Singapore, 66% of institutional investors said that they would continue to recommend crypto as an investment. That said, 18% said they would “cautiously recommend” crypto as an investment to their clients, up from 14% in Q1 2022. 

In Singapore, more than a third of institutional investors surveyed said they would increase investments (35%), invest in increasing their crypto offerings (34%), and expand their knowledge base for their clients (33%).

56% of Singapore retail investors believed that crypto is trustworthy. 

On the other hand, 61% of Singapore institutional investors said crypto is still trustworthy, a significant drop from 70% who said so in Q1 2022, which is also the largest drop in the APAC region. 

Is cryptocurrency safe?

Cryptocurrency is built on blockchain technology, a digital ledger that stores information about cryptocurrency transactions. Because of its architecture, blockchain allows information to be stored securely while making it hard for others to tamper with the data. 

Moreover, because data is stored in a distributed network instead of a single, centralised location. This also makes it difficult for hackers to hack, as they would need to hack every computer that’s on the network. 

However, that doesn't mean that blockchain is unhackable; in fact, several high-profile hacks, especially on cryptocurrency start-ups, have caused them to lose millions of dollars. One example is the hack on Coinheck, which caused the firm to lose US$534 million. 

Cryptocurrency risks

Aside from the lack of regulation in the crypto space, 53% of Singapore retail investors in the survey cited high risk as the top barrier to crypto adoption. 

The recent high-profile cases of crypto catastrophes such as Terra Luna and Hodlnaut are some examples of the crypto winter that we’re facing now.

While cryptocurrency is infamous for its volatility, speculative nature, and sharp movement in prices, it has also given super high returns to investors in the past. 

For example, Bitcoin prices rose to US$24,000 in August, and prices were hovering between US$22,000 to US$25,000 at one point in August. However, in a space of a few days, it fell below US$20,000, which caused millions of dollars lost. 

As the saying goes: high risk, high reward. Remember that all investments carry risks; while some see merit in crypto, it might not be for you, especially if you can't handle the highly speculative nature of crypto.

If you’re going to invest in crypto, remember the rudimentary strategies: diversification, research, preparing for volatility, understanding your investment horizon, rebalancing, and staying disciplined.

The Monetary Authority of Singapore (MAS) is also planning to roll out new regulations to make it more difficult for retail investors to trade crypto in Singapore, especially those who are “irrationally oblivious” about the risks, despite the warnings and measures.

Looking for a way less risky way to invest?

If you’re looking for less risky investments, you can consider investing in low-risk investments such as fixed deposits, Singapore Savings Bond, treasury bills, Supplementary Retirement Scheme, CPF, and robo advisors.

Get ahead of your finances with a Citi Plus Account. You can also earn high interest on your savings with their Citi Interest Booster Account.

Read these next:
5 Ways To Invest Money That Are Better Than Buying Toto
The SSB vs CPF: Which One Has Better Returns?
13 Best Fixed Deposit From Top Banks In Singapore To Lock In Your Savings
Robo Advisors Singapore: A Complete Guide
3 Reasons Why You Should Start Investing With A SRS Account