Crypto values ​​such as Bitcoin are mostly rejected by German financial service providers.

In a survey published on Tuesday by the research institute at Frankfurt's Goethe University, the Center for Financial Studies (CFS), more than half of the experts and executives surveyed classified this form of digital assets as purely speculative objects that had no fundamental value .

The recent slumps in the price of Bitcoin, Ethereum and other crypto assets are considered by 27 percent of the participants to be an overdue course correction after a rapid rise in prices.

Since hitting a record high of around $68,000 in November 2021, the Bitcoin price has lost 70 percent in value and at times fell below the $20,000 mark.

Bitcoin was trading at $21,100 on Tuesday.

Markus Fruehauf

Editor in Business.

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A clear majority of around 60 percent in the CFS survey were convinced that crypto assets had no future as a store of value or means of payment.

As a result, they miss key features of currencies that are backed by central banks.

These too are increasingly concerned with a digital form of central bank money.

The European Central Bank (ECB) wants to present a first prototype of the digital euro in the coming year.

The timeframe for the introduction is still vague.

ECB President Christine Lagarde had promised a period of five years in 2021.

In the CFS survey, as many as 35 percent of respondents still think it is possible that crypto assets could eventually be accepted as a store of value and a means of payment.

Even if the price falls further, the vast majority of 90 percent do not fear any impact on international financial stability.

Despite this, more than 80 percent call for greater regulation of the crypto markets.

“The survey confirms that the EU is on the right track with the MiCA regulation that has now been adopted.

This is the only way that the growing ecosystem around cryptoassets can stabilize,” Professor Volker Brühl from the CFS was quoted as saying in the press release.

Clouded expectations

Also on Tuesday, the Frankfurt financial market researchers presented their CFS index on the mood in the German financial sector.

This once again deteriorated significantly in the second quarter.

However, the index is where it was two years ago, when banks and financial services firms were beginning to recover from the pandemic outbreak.

According to the CFS, the downward trend in the second quarter of 2022 is mainly based on the lower growth in sales, earnings and employees and the declining growth in the investment volume.

The expectations of the entire financial sector in terms of sales and earnings growth and the growth in investment volume are also pessimistic for the current quarter.

“The gloomier expectations of the financial sector reflect the high level of uncertainty in the economy as a whole.

Since the financial crisis, the industry has only been more pessimistic at the beginning of the pandemic than it is today," says CFS Director Professor Andreas Hackethal, commenting on the results.

The international importance of Germany as a financial center is also viewed more skeptically.