Cryptocurrencies like Bitcoin (CRYPTO: BTC) have arrived as a mainstream investment in 2021.
This is because institutional investors have started buying into the asset.
It's difficult to work out precisely why the professionals have changed their tune. After all, the criticism that the cryptocurrencies don't have any intrinsic value has not altered.
The value of the currency is still purely driven by supply and demand.
Despite increasing ownership, it seems most Australians share this scepticism.
New research from comparison site Finder shows that 73% of Australians think Bitcoin is a 'bubble' that will eventually burst.
One Bitcoin was worth about $450 in 2015, while today one Bitcoin is worth more than $45,000. That's a 100-multiple return in six years.
Related to the bubble forecast is that 63% of those surveyed thought Bitcoin is a "purely speculative" investment.
Medallion Financial Group managing director Michael Wayne admitted to The Motley Fool last month that there are many people with valid investment theses for cryptocurrencies.
"I wish these people the best luck, but also caution that there's an equally as good chance it could all end in tears."
Image source: Getty Images
Bitcoin believers are likely to be younger
Despite the scepticism found in the study, more than one third of Australians (35%) thought Bitcoin would eventually be used more than fiat currency.
"While only 17% of Aussies own cryptocurrency, twice that amount believe it has a significant role to play in the future of currency," said Finder personal finance expert Kate Browne.
Not surprisingly, generation Z was the most likely to believe in Bitcoin's world domination. More than half of them, and 45% of millennials, thought fiat currency would one day take a back seat.
Marcus Today director Marcus Padley said last month that the volatility in value puts off most older Australians from buying into cryptocurrencies.
"Bitcoin isn't an investment — it's too volatile. Certainly not for my [client] demographic, as most of my members are over the age of 60," he told ABC News Breakfast.
"It's too much of a gamble. It's 'unannualisable'."
Funnily enough, the Finder research showed Australians were split right down the middle on whether Bitcoin is "a legitimate investment".
