Alternative Investments Like Crypto Form Half of Russian Non-Qualified Investors’ Portfolios

Investments in alternative assets such as cryptocurrencies account for over half of the portfolio of non-qualified Russian investors, a recently held survey has indicated. Almost half of them consider digital currencies like bitcoin as a potential hedge.

Cryptocurrencies Outperform Traditional Currencies and Stocks in Russia

Alternative investments like crypto, real estate, and antiques constitute more than half of the portfolios of non-qualified investors in the Russian Federation, according to a new poll conducted by Investing.com. Digital currencies are leading among these options with 46% of 1,000 respondents viewing them as a hedge investment for the future.

Another 37% of those betting on alternative assets look at buying real estate as an effective investment, the Russian daily Izvestia reported, quoting the results from the study. Around 47% of the participants regarded gold as a reliable instrument, especially during times of crisis, while 27% admitted they had never invested in the precious metal as they prefer to put their money into stocks and bonds instead.

Property has historically played the role of a hedge asset, but cryptocurrency is a clear trend in 2021, head of Investing.com Russia’s Anastasia Kosheleva has been quoted as noting. She also pointed out that digital financial assets are even outperforming traditional fiat currencies, stocks, and other stock market instruments.

Russian Investors Rank Among Most Active in Crypto Market

Russians are some of the most active participants in the digital currency market, Bank of Russia has told Izvestia. The regulator recently revealed that the annual volume of crypto transactions made by Russian residents has reached $5 billion. In its Financial Stability Overview for Q2 and Q3 of 2021, the monetary authority also highlighted the risks of investing in cryptocurrencies for both investors and the country’s financial stability.

At this point, it’s unclear whether or when the central bank intends to introduce restrictions on how much non-qualified investors can put into crypto assets. In early October, news came out that Russian lawmakers are contemplating restrictions for private crypto investors. About the same time last year, Bank of Russia proposed an annual limit of 600,000 rubles (around $8,000) seeking public opinion on the threshold.

Russian investments in digital coins are somewhere in the range between $300 and $500 billion, according to an estimate provided by Vladimir Ananyev, analyst at investment company Exante. They have registered a six-fold growth over the past year, he remarked. Both the value of these investments as well as the number of market participants have increased significantly, Ananyev added.

The most popular digital asset with Russian investors is bitcoin (BTC), but altcoins are attracting more and more attention, the expert emphasized. The trend has been confirmed by the drop in dominance of the cryptocurrency with the largest market capitalization to 42%.

According to the publication, discussions on proposals to legally define the status of qualified investors in the crypto market are currently being held in Russia. However, domestic requirements for this category will not apply to retail investors on foreign cryptocurrency platforms, Ananyev noted, as the majority are not regulated in the Russian Federation.