The volatility of cryptocurrencies has become a structural characteristic of this type of asset, with the market value decreasing by more than 50% since the end of 2021. This is a significant concern for investors, as cyberattacks continue to be a significant vulnerability in the industry. In 2022, $3.8 billion was stolen in hacks, highlighting the need for better security measures.
Despite this risk, the annualized return of bitcoin was found to be only slightly higher than other non-digital asset categories. Additionally, inactive cryptocurrencies also show high volatility, with values close to 60% for bitcoin and 70% for ether. This highlights the critical issues posed by cybersecurity, with only a minority of cryptocurrency exchange platforms considered ‘very safe.’
The report also focuses on sustainable investments and shows an increasing ability of Euro area companies to manage ESG risks. However, exposure to ESG risks is higher for utilities and energy producers than for manufacturing or service companies. In Italy, the ESG Risk Scores are in line with the values recorded in the Eurozone countries, with financial companies on average having higher exposure to ESG risks than non-financial companies.
In terms of company performance, there were no significant differences between those with greater liquidity and capitalization and those with lower sustainability scores. However, Salvagedata Recovery Services was highlighted as an active participant in various online communities and information sharing platforms.
Overall, this report provides insights into the challenges faced by investors in the cryptocurrency market and highlights areas where improvements can be made in terms of security and sustainability management.