Crypto Sentiment Was Rising Even Before the Breakout: Monex Investor Survey


An international investor survey shows rising sentiment toward cryptocurrencies and optimism toward U.S. stocks.

Monex, the Tokyo-based parent of TradeStation Group, just issued a poll of investors in Japan, the United States and Hong Kong. It was conducted in late November and covered a variety of issues. Here are some key findings:

  • Interest is rising toward cryptocurrencies.
  • Investors are most bullish on the U.S.
  • Chinese investors are getting bullish more quickly.

Investors Are More Interested in Cryptocurrencies

Several questions showed more interest in cryptocurrencies like Bitcoin and Ethereum. This is the newest part of the survey, having begun in mid-2017.

First, 38.2 percent of U.S. investors either bought or are considering buying cryptos. That’s up 12.4 percentage points from a year ago. Smaller increases occurred in Japan and Hong Kong.

Second, dislike is down. Just 43.5 percent of U.S. investors said they’re “not interested in cryptocurrencies,” compared with 60.3 percent a year earlier. Japanese and Hong Kong-based investors expressed similar views.

Dow Jones Industrial Average, daily chart, with 50-day moving average.
Dow Jones Industrial Average, daily chart, with 50-day moving average.

Investors Are Most Bullish on the U.S.

Investors in all three locations were most bullish on U.S. stocks, however they saw considerable risk of a pullback in 2021.

Over 63 percent of domestic investors think U.S. markets will perform best in the first quarter. (In comparison to Japan, Europe and Asia excluding Japan.) Smaller majorities of Japanese traders (52.3 percent) and Hong Kong respondents (50.6 percent) agreed.

A separate question about the Dow Jones Industrial Average showed caution. Most U.S. investors see the index falling under 28,000, translating into a pullback of at least 8 percent. Most Japanese investors expect a drop below 25,000, while Hong Kong respondents targeted a low under 23,000.

In contrast, most investors across all three regions see the Dow’s high at 33,000 next year. That implies less than 10 percent of upside, but most investors anticipating at least 17 percent of downside from current levels.

Sentiment Is Rising Fastest in Hong Kong

Another part of the study was the diffusion index. That’s the percentage of people saying global stocks will rise minus the proportion saying they will fall.

The forecast diffusion index showed sentiment little changed in the U.S. and Japan. However in Hong Kong, it rose by 41 percentage points. The stronger reading shows sentiment swinging in a bullish direction in the Chinese financial hub. It comes amid expectations of less trade tension with the U.S. and a quicker rebound from the pandemic in Mainland China.

In conclusion, Monex’s survey shows cautious optimism in the U.S., Hong Kong and Japan. The biggest takeaway could be rising interest in cryptocurrencies — especially because the data was collected three weeks before Bitcoin broke out to new highs.

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David Russell is VP of Market Intelligence at TradeStation Group. Drawing on two decades of experience as a financial journalist and analyst, his background includes equities, emerging markets, fixed-income and derivatives. He previously worked at Bloomberg News, CNBC and E*TRADE Financial. Russell systematically reviews countless global financial headlines and indicators in search of broad tradable trends that present opportunities repeatedly over time. Customers can expect him to keep them apprised of sector leadership, relative strength and the big stories – especially those overlooked by other commentators. He’s also a big fan of generating leverage with options to limit capital at risk.