Majority of Crypto Investors Believe Bitcoin Will Top $100K This Year, Survey Says

The "Tinkerbell effect" theory of investment may apply to Bitcoin, according to the results of a survey conducted by GamblersPick, a website devoted to online gaming.

The survey of 1,015 people found that 54.3% of crypto investors believe Bitcoin will climb to $100,000 this year.

The survey offers no analysis of the cryptocurrency's fundamentals or outside forces affecting its price, such as a proposed increase in the capital gains tax, or a recent disruption in Bitcoin mining—and isn't intended to because it looks only at sentiment.

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The online casino review site GamblersPick has issued results of a survey of crypto investors that shows that a majority believe Bitcoin will top $100,000 in value this year.

But the survey may be revealing if the "Tinkerbell effect" animates Bitcoin's price.

"Bitcoin's value will continue to rise and fall depending on what people believe it is worth," Dr. Marion Laboure, an analyst at Deutsche Bank, said in a research report.

"This is sometimes called the 'Tinkerbell Effect'—a recognized economic term stating that the more people believe in something the likelier it is to happen," she wrote, "based on Peter Pan's assertion that Tinkerbell exists because children believe she exists."

Age and lack of extensive finance experience may be a factor among some retail investors.

Crypto investors are overwhelmingly young, with 80% of millennials investing in Bitcoin followed by Gen Xers and Baby Boomers, the survey by GamblersPick found.

A total of 21.4% of investors invested in crypto for the first in 2018. Only 14.1% invested for the first time in 2019 and 10.4% in 2020, but 21% are planning to make an initial investment this year, almost double that of 2020.

The initial crypto investment of respondents was $2,235, and the average investment totaled $9,305, the survey found.

But 77% of investors had set up automatic contributions to boost the size of their crypto accounts, suggesting they believe the price will rise in the future. However, 58% pulled some or all of previously invested money. Withdrawals averaged $3,305.

A plurality of investors (44.7%) placed their bets on Bitcoin, Bitcoin Cash and Bitcoin SV. Ethereum, the world's second most popular crypto, received attention from 5.5% of respondents.

Bitcoin proponents believe it is now a distinct asset class, as evidenced by the decision of top Wall Street investment banks and major mutual funds to make cryptocurrency investments available to clients. However, skeptics counter that Bitcoin is too volatile to make it a store of value.

This raises a basic question: Will retail investors, who lack Wall Street's knowledge and research capability, be crushed in a profound and prolonged cryptocurrency downturn in the future?

What's clear is that none of those surveyed by GamblersPick invested in Dogecoin, the parody cryptocurrency launched in 2013 and plugged in playful tweets by Tesla founder Elon Musk.

Eddie Ghabour, an analyst at KeyAdvisors Group and author of Common Sense Bull, recently told Yahoo Finance the cryptocurrency market is a bubble similar to the run-up in technology stocks that burst in 2000.

"I look at Dogecoin as more of a speculative play that when this bubble bursts, it will probably cease to exist. That's my opinion." he said. "In regards to crypto, Ethereum and Bitcoin are the two that I think will last even through the bubble."

Contrary to the basic investment strategy of spreading the risk, a 33-year-old Los Angeles man said he invested his entire life savings of $188,000 in Dogecoin in February when it traded at about $0.05. The price later rose to $0.45, making him a paper millionaire. But Newsweek couldn't independently verify his windfall.

Mark Cuban Dallas Mavericks
Dallas Mavericks Mark Cuban smiles during the game between the New York Knicks and the Dallas Mavericks at Madison Square Garden on January 30, 2019 in New York City. Photo by Elsa/Getty Images

For serious investors, it doesn't matter because Dogecoin is a joke—even if shrewd entrepreneurs like Mark Cuban, owner of the NBA Dallas Mavericks, use it to buy buckets of publicity on the cheap.

Interest in Bitcoin remains strong. CME Group said it will make micro Bitcoin futures available for trading on May 3.

The new contracts will be 1/10 the size of a single Bitcoin, or 1/50 the size of most current Bitcoin futures, creating a new way for investors to participate in the cryptocurrency market.

A futures contract is an agreement to buy or sell a commodity or asset at a predetermined price at a specified time.

On Monday, Bitcoin opened at $50,456.01, rose as high as $54,043.43, and changed hands at $53,376.69 in mid-day trading, ending five consecutive days of losses.

It's up 83.77% for the year, CoinDesk reported.

A flash crash and news of President Joe Biden's proposed increase in the capital gains tax had slashed about 20% from Bitcoin's record high of $64,829.14.

Market Pulse

If you live outside New York, this will read like a dispatch from Mars: Median rent in Manhattan fell about $700 to a new low of $2,700 a month. StreetEasy said that's the lowest dating back to 2010.

Apartment building along the upper West Side
Sunset falls on apartment building along the upper West Side of Manhattan and the West Side Highway in New York City on March 23, 2019. Gary Hershorn/Getty Images

It's a basic supply and demand equation.

Thousands of people have fled to the suburbs during the COVID-19 pandemic, and landlords therefore must scramble to fill vacancies. Many property owners now offer at least one month's free rent to attract new tenants in addition to lower monthly rent.

"The number of rental units available is one of the key factors driving the rent drops and surge in concessions," StreetEasy said in a report.

"In the first quarter, rental inventory in Manhattan and Brooklyn was more than twice as high as it was in (the first quarter of) 2020," the report said. "And Queens inventory was 97% higher."

San Francisco, Seattle, and Boston also reported sharp drops in monthly rent. But rents increased more than 10% in mid-sized cities such as Boise, Idaho and Fresno, California, World Population Review reported.

"Before the pandemic, a two-bedroom apartment in San Francisco had a median cost of $3,146, or 3.4 times a two-bedroom in Boise at a median of $929," the report said. "As of January 2021, the San Francisco apartment is $2,294, or 2.2 times that of the Boise two-bedroom, which is now $1,024."

Overall, rent fell in Alaska, Colorado, the District of Columbia, Georgia, Hawaii, Kansas, Maryland, Massachusetts, Minnesota, Rhode Island, Texas and Wyoming, but ticked up in other states.

Unsurprisingly, rent is generally more expensive in states with higher incomes, despite declines due to the coronavirus pandemic.

The four states and the District of Columbia with the highest average rent are among the top ten highest-earning states.

D.C.'s median household income is about $85,203 a year, Massachusetts's is $81,215, California's is $75,235, Hawaii's is $81,275, and New Jersey's is $82,545.

The ten states with the highest average rent for a one-bedroom apartment are Hawaii ($1,617), California ($1,503), Maryland ($1,392), New Jersey ($1,334), Massachusetts ($1,282), New York ($1,280), Colorado ($1,271), Washington ($1,258), Alaska ($1,244) and Virginia ($1,234).

West Virginia had the lowest rent for a one-bedroom apartment at $725.

Tesla Autopilot Crash Self-Driving Vehicle Autonomous Car
Elon Musk sits in the back seat of a Tesla vehicle during a visit to a future Tesla factory near Berlin, Germany on September 3, 2020. ODD ANDERSEN/AFP/Getty

Elon Musk, founder of Tesla and SpaceX, has said he wants to colonize Mars.

"If there's something terrible that happens on Earth, either made by humans or natural, we want to have life insurance for life as a whole," Musk said last year during a virtual Mars conference. "Then, there's the kind of excitement and adventure."

Who knows, some entrepreneur may one day accept Bitcoin for property on Mars.

Until that day, New Yorkers will have to contend with out-of-this-world rents.