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Could tokens overshadow traditional finance?

08/05/2022

As we’ve written before, tokens have been growing in popularity in recent years. But could they overshadow traditional finance for investors in the future? 

Tokenise conducted research into the subject, surveying 2,000 UK residents to understand their appetite for asset tokenisation. Despite the fact that tokens are a relatively new investment type, the survey responses indicate that they could overshadow more traditional investments, like oil and gold, in the near future. 

 

Growing interest

Despite the fact that tokens are only recently gaining media attention, over a quarter of respondents stated that they have been exposed to this investment type. Meanwhile, 24% said they would be ready to invest in tokens in the next 12 months. 

The most popular reasons why amongst this group were the potential for higher returns (17%) and the ability to invest in tokens through a regulated provider (15%). 

Survey respondents included investors who already have tokens in their portfolio. The main decisions to buy include PR-savvy or prominent issuers, like musicians, artists and collectors (55%), and the ability to purchase either online or through an app (49%). 

 

Technologically secure

When asked to compare the risk profiles of different investment types, cryptocurrency came out the highest, with 41% believing it was the riskiest investment type. Tokens were seen by this group as significantly less risky. 

When compared with investments like gold, oil and property, just 11% of survey respondents stated that tokens are the most risky. Tokenise suggests that this confidence in tokens may be down to the security that blockchain technology affords. 

 

Further education needed

Despite the positive sentiments of survey respondents towards tokens, it is clear that more education is needed in this area. 30% of those surveyed had never heard of digital assets – which includes tokens, NFTs, fractional ownership and cryptocurrencies. 

Respondents themselves also made it clear that they would welcome more information on the topic. 47% say they haven’t yet invested as they don’t know enough about tokens, while 34% say they aren’t aware of a safe and easy way to invest. What’s more, 31% confuse tokens and cryptocurrency – showing that more work needs to be done to educate the market about digital assets if this is an asset class that is going to become more mainstream.

 

“Stable Rise Limited is not authorised or registered by the Financial Conduct Authority. The marketing materials are not intended to provide financial advice nor promote any individual financial products.”

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