Bitcoin has quickly asserted itself as an alternative asset deserving of our attention, but if you’re a stickler for details, the real debate is whether it is a currency, commodity or something else entirely. Up until recently, this debate wasn’t given much thought. After all, cryptocurrencies are meant to solve many of the problems plaguing the current system of fiat money. Naturally, then, they are currencies.
Bitcoin as a Commodity
Investability is one of bitcoin’s most defining characteristics. With a market cap of more than $160 billion, the cryptocurrency allows investors to take capital or gain exposure in meaningful ways. As mainstream adoption catches on, bitcoin investments will also make their way into traditional vehicles, such as ETFs and futures. In this vein, it has many of the same characteristics as commodities.
LendEDU Survey
Student and personal loan marketplace LendEDU has been conducting surveys on how consumers perceive cryptocurrencies. This past month, it commissioned a new survey of 564 respondents who have already invested in bitcoin. One of the questions that caught our attention was whether investors classify bitcoin as a commodity or a security.
Less than one-third (31.56%) viewed bitcoin as a commodity, compared with 39.54% who saw it as a security. Interestingly enough, 28.9% of respondents said they were unsure how to classify the cryptocurrency.
It’s interesting to note that “currency” wasn’t listed as one of the responses. While it’s reasonable to assume that many associate bitcoin with digital currency, most investors seem to hold a different opinion.
Further, the LendEDU survey found that 21.81% of respondents described bitcoin as “a long term store of value, like gold or silver.” Meanwhile, a mere 8.16% said they plan on using bitcoin “for transaction or repurchases” instead of as an investment.
The vast majority of poll takers have held bitcoin for more than one year, which means this is likely a rich crowd.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
