A recent survey about attitudes towards cryptocurrency investments reveals some interesting facts about those who own cryptocurrencies. It reveals that in the US, the demographics invested in cryptocurrencies more than any other is Millennial men with higher incomes. The survey also went deeper to find out what is driving the investment in the cryptocurrencies and which factors work against such investments.
1000 Americans were questioned using the Amazon’s Mechanical Turk platform, as reported by the CNN. The company that conducted the survey was Clovr. Mike Cribari, a co-founder of Clovr said that it will take a while for people to see cryptocurrency as a real alternative to the government issues money, which can be used to buy everyday things.
“People need to be able to use cryptocurrencies more for things like buying their lunch.”
Mike Cribari, Clovr
However, the survey reveals different view and feelings towards cryptocurrencies, at least among Americans. The results may be different in other parts of the world since there cryptocurrencies might provide different utility due to the nature of the financial system, income, political system or something else.
People Expect High Returns From Speculation With Cryptocurrencies
People definitely still don’t see cryptocurrencies as the money which they can use. Historically many things have been used as money, and they all had an important element – trust. People had to have trust the other side will accept it for payment and they had to trust that the value will stay stable over a period of time. The survey shows that, while more than three quarter of people surveyed knew what a cryptocurrency was, the top feelings associated with it was uncertainty and confusion, while excitement and anticipation took the next two spots.
This might have been expected since the value of cryptocurrencies has fluctuated wildly over past years, making them more suitable for day-traders than regular investors. While the prices of coins such as Bitcoin, Litecoin Ripple and others did explode in 2017, looking at the sorry state of crypto valuations today, in Q4 2018, it’s reasonable to expect that many have been burned by the collapse in prices – hence uncertain and confused.
This is also something that Cribari mentions when he reflects on the bubbles of the past – a persistent rule was the unsophisticated small investors pile up only at the top of the boom, only to suffer heavy losses when the trend reverses. This is also confirmed by the data from the Federal Trade Commission – Americans lost over half a billion USD just in the beginning of 2018.
With this in mind, lets dive in the survey results about investment attitudes towards cryptocurrency. The people see huge returns as the main reason to invest in cryptocurrencies. Meaning a lot of the sentiment is based on the previous returns, which, as we know is never a guarantee for the future returns. Furthermore, people have invested in cryptocurrencies because – everyone’s doing it and a fear of missing out. Both are not really the best reasons to invest into anything, at least not if you are not considering fundamentals too. And most people who invested do not seem to understand this.
This reminds a lot about the anecdote from the 20s, from the famous businessman John Kennedy, getting stock advice from the shoe shine boy who recommended to buy Hindenburg, based on the recommendation from the customer before. Kennedy thought, “You know it’s time to sell when shoeshine boys give you stock tips.”
Cryptocurrency Investor Demographics
Not everyone was easily drawn into the boom, those who didn’t invest in cryptocurrencies said they had no knowledge, and found them too risky. However, some did also cite their “gut feeling” which again, is not a more reliable indicator than “everyone’s doing it”.
Overall about 42% of surveyed men invested in cryptocurrencies, compared to only 23% women. People with generally higher incomes were more ready to drop some bucks into that kind of investment – over 40% for people with over $75,000 yearly incomes. Millenials were the ones that did most of the investing, with 40% almost double than 24% of the Generation X.