Published: October 28th, 2020
Recent research puts cryptocurrency investment a shot above gold in Russia. According to the World Gold Council, the over 2000 investors it surveyed showed that cryptocurrency is the fifth-largest investment.
The World Gold Council (WGC), a market development organization in the gold industry, recently released a survey indicating that cryptocurrencies are the fifth-largest investment in Russia.
The organization, a specialists' grouping and leading voice of the gold industry, collaborates with most industry leaders in the precious metals sphere. It published the report on gold.org, a popular web portal it manages. The findings show that Russian investors consider cryptocurrency as the fifth-most preferred investment vehicle.
With an industry approval of 17%, cryptocurrencies are 1% above gold among the polled 2.023 Russian investors. According to the research, virtual currencies were outstripped only by savings accounts, which are the most preferred, and foreign currencies, real estate, and lastly, life insurance, in that order.
Gold is sixth right beneath cryptocurrencies, followed by collectibles, gold coins, government-issued bonds, and stocks. The WGC report adds that crypto trading is taking place and thriving in Russia despite its gray regulations on digital assets.
The report's authors noted that the rise of cryptocurrencies indicates that the desire for choice among investors is growing, as is the appeal for virtual currencies among retail investors. As the Russian investment market defines itself, opportunities for various investment options are emerging that gold may have to respond to, the report added.
The WGC report sought the opinion of investors drawn from every part of Russia. Of these participants, 68% said gold is a worthwhile store of value. Most Russian investors think that gold maintains its long-term value and prospects against inflation fluctuations compared to currencies and other investment vehicles, the report added.
However, a chart cited in the report indicating Russia's investment in the past 12 months shows that cryptocurrencies command a higher percentage than gold.
The Russian investors' overwhelming approval comes only months after Goldman Sachs, an American multinational investment bank, advised its customers against considering Bitcoin as a viable investment vehicle.
As Russian investors give cryptocurrencies a standing ovation, Bank of Russia, the country's central bank, plans to enforce a yearly cap on the amount of cryptocurrency that a retail investor can buy.
According to these proposals, novice investors will buy coins worth only 600,000 rubles (Approx. $7,740) or below annually. However, qualified investors will not have to adhere to these proposed regulations.
The authorities will only confer the investor status on individuals with a net worth of more than 6 million rubles (Approx. $77,400) or hold an economics degree. Investors have complained that this proposed law is draconian.
Russian authorities are receiving views from the public on an exercise that ends on Tuesday, October 27. However, as it stands, it appears that the country has ratified regulation about digital currency issuance.
The transcontinental Baltic region country has increased its efforts in improving virtual currency legislation lately. Recently, the Bank of Russia presented a potential central bank digital currency (CBDC) project rollout before the public.
Capping crypto holding in Russia is a tad ambitious considering individuals and public companies hold vast amounts of virtual currencies. According to Coin98 Analytics, more than 13 public companies have now put money in Bitcoin. In total, the amount of crypto help by these companies topped $6.8 billion.
While Russian companies may not make a sizable chunk of such wealth in crypto, experts think it only is a matter of time. If the Russian cryptocurrency regulations come to force, such factors as company holding may end up affecting the amount of crypto that individuals can hold, said William Suberg, a Cointelegraph staffer.
Aside from the Bank of Russia, other central bankers have discredited Bitcoin for reasons only known to them over time. In a recent tweet, Andrew Bailey, the Bank of England's governor, said that Bitcoin does not have what cryptocurrency enthusiasts call intrinsic value.
England's top banker made the above remarks while cautioning investors against using the cryptocurrency as a means of payment. He said that Bitcoin's intrinsic value might only exist because people want it.
However, Bailey's comments were refuted by renowned crypto backers who think the central banker is out of touch with reality. Michael Saylor, founder, chairman, and CEO of MicroStrategy, a business intelligence company headquartered in Virginia, tweeted what is probably the coin's most resounding endorsement.
Saylor said that Bitcoin is the first digital monetary system that stores all of the world's money for every individual, corporation, and government, in a way that is fair and equitable and without losing any of it. Saylor added that if that characteristic does not speak to Bitcoin's intrinsic value, he does not know what could.
Saylor's MicroStrategy was the first company to invest heavily in Bitcoin when it tied up most of its treasure in the cryptocurrency last summer. During that investment rage, Saylor said that MicroStrategy felt very confident investing in Bitcoin because it is less risky than holding cash or putting money in gold.
Russia's veiled opposition to Bitcoin and cryptocurrencies is not a new phenomenon. In mid-2019, the country's president, Vladimir Putin, said he wanted to have a cryptocurrency regulation by July 1, 2019.
The regulations he was referring to were part of the Digital Assets Regulation Bill, which the country's parliament passed towards the end of July. The said piece of legislation provided the legal definition of Bitcoin and disallowed its use as a payment mode.
A leading voice in the gold industry recently released the findings of research it undertook that shows that cryptocurrency is the fifth-preferred investment vehicle. The findings put crypto just above gold but below traditional investment tools such as savings accounts, real estate, life insurance, and foreign currency. The research aligns with market sentiment, which has been pro-cryptocurrency of late. Overall, it still is the most significant endorsement of cryptocurrencies this year.