Cryptocurrency Craze: Americans Invested In Digital Assets

Cryptocurrency has become increasingly popular over the last decade, with Bitcoin, the first cryptocurrency, hitting an all-time high of over $73,000 in March 2024. Despite the hype, cryptocurrencies are a risky and volatile investment, and only about 16% of Americans have ever invested in, traded, or used a cryptocurrency. This article will explore the latest statistics on cryptocurrency investment and the demographics of crypto investors in the United States.

16% of Americans have invested in crypto, with 46% reporting worse performance than expected

According to a Pew Research Center survey, 16% of American adults have invested in, traded, or used cryptocurrencies such as Bitcoin or Ether. This figure has remained unchanged since September 2021, despite the increased media attention surrounding crypto. Of these investors, 46% reported that their investments performed worse than expected, while only 15% saw better-than-expected results. A further 31% stated that their crypto investments turned out as expected, and 8% were unsure.

The survey, conducted in July 2022, also explored the reasons behind people's decisions to invest in cryptocurrencies. About three-quarters of the 16% of American investors cited wanting a different way to invest (78%) and believing it is a good way to make money (75%) as major or minor reasons for their involvement. Additionally, 54% of these investors considered it easier to get into crypto than other investment avenues.

The demographics of crypto investors also provide interesting insights. Men, particularly those aged 18 to 29, stand out, with 42% having used cryptocurrencies compared to only 17% of women in the same age group. Overall, men are 14 percentage points more likely than women to invest in crypto. Younger adults, under 50, are also more likely to be crypto investors (25%) than their older counterparts aged 50 and above (7%). Furthermore, the survey revealed racial and ethnic disparities, with one-fifth of Black, Hispanic, or Asian Americans investing in crypto, compared to only 13% of White Americans.

While crypto investing is relatively niche, most Americans have heard about it, with 88% reporting some level of awareness. However, the majority view it as a risky endeavour, and recent crypto market turmoil and scandals have further shaken confidence in its reliability and safety.

26% of millennials own Bitcoin, compared to 14% of all US adults

According to a Morning Consult survey from July 2023, 26% of millennials own Bitcoin, compared to 14% of all US adults. This is a significant proportion of the US population, and it reflects a broader trend of cryptocurrency adoption, particularly among younger generations.

Cryptocurrency ownership is rising, and this increase is driven predominantly by millennials. On average, most people hold a small amount of their working income in cryptocurrencies, with individuals holding relatively small amounts (approximately $620). However, the distribution of holdings is skewed, with a tiny fraction (0.01%) of Bitcoin owners controlling nearly one-third of the total supply.

Millennials' proclivity for Bitcoin may be indicative of a bright future for the digital asset. Millennials are more likely to view Bitcoin positively compared to older generations, with many preferring it to traditional financial assets. For example, more than a quarter of millennials would rather own $1,000 of Bitcoin than $1,000 in stocks, and significant portions would choose Bitcoin over government bonds, real estate, or gold. This preference for Bitcoin could be a leading indicator of future trends, as younger demographics often set the tone for the future, especially regarding technology.

Other studies support the trend of higher cryptocurrency adoption among younger generations. A Charles Schwab survey from October 2022 revealed that almost 50% of Gen Z and millennials want crypto in their retirement funds, and 43% of Gen Z and 47% of millennials already invest in cryptocurrencies outside their 401(k) retirement accounts. Additionally, a Bitget research study from April 2023 found that 46% of millennials across major population countries, including the US, China, Japan, Germany, Indonesia, and Nigeria, own cryptocurrencies.

While the percentage of US adults investing in cryptocurrencies is still relatively low, the impact of this new asset class is significant. The total value of all existing cryptocurrencies is around $2.02 trillion, with Bitcoin accounting for about $1.14 trillion of that figure as of September 2024.

Crypto is viewed as a risky investment by 60% of Americans, up from 45% in 2021

According to a CNBC Make It: Your Money survey, 60% of Americans view crypto investing as highly risky, an increase from 45% in 2021. This shift in perception may be influenced by recent developments in the crypto market, including significant losses and high-profile bankruptcies.

The survey also revealed generational differences in risk perception. While younger generations like Gen Zers (38%) and millennials (46%) consider crypto investing moderately risky, older generations like Gen Xers (60%) and baby boomers (80%) view it as a much riskier proposition.

The risky nature of crypto investing is further highlighted by the volatile performance of cryptocurrencies. Among American crypto investors, 46% reported that their investments performed worse than expected, while only 15% experienced better-than-expected returns.

Despite the risks, crypto has gained traction among investors, with 16% of American adults having invested in or traded cryptocurrency. This interest in crypto can be attributed to factors such as the desire for alternative investment options (78%) and the potential for financial gains (75%).

Additionally, crypto investing has a higher prevalence among specific demographic groups. Men, particularly those aged 18-29, are more likely to invest in crypto than women, and higher-income earners ($100,000 or more annually) are overrepresented among crypto investors compared to their proportion in the general population.

In conclusion, while crypto is viewed as a risky investment by a significant portion of Americans, it continues to attract interest from investors, especially those seeking diverse investment opportunities and potential financial gains. However, the volatile nature of the crypto market and its susceptibility to external factors contribute to the perception of crypto as a risky investment option.

17% of US adults have invested in, traded, or used crypto, according to a 2023 survey

In the United States, 17% of adults have invested in, traded, or used cryptocurrency, according to a 2023 survey by the Pew Research Center. This percentage has remained stable since 2021, despite the growing popularity of crypto in the news.

The survey also revealed that 46% of cryptocurrency investors said their investments performed worse than expected, while only 15% reported better-than-expected results. Additionally, men are more likely to invest in cryptocurrencies than women, with 70% of investors being male.

The interest in cryptocurrency investing varies across different demographic groups. Younger generations, such as Gen Z and millennials, show a higher inclination towards crypto investing, with 38% of Gen Zers and 46% of millennials considering it a highly risky venture. On the other hand, older generations like Gen Xers and baby boomers exhibit more scepticism, with over 60% and 80%, respectively, deeming it a high-risk investment option.

Despite the risks and uncertainties associated with cryptocurrencies, there is a growing interest in this alternative form of investment. The introduction of new, regulated Bitcoin exchange-traded funds (ETFs) and the potential integration of crypto into banking and credit card services indicate a shift towards wider acceptance and adoption. However, it remains to be seen whether these changes will attract new investors or primarily appeal to those who are already invested in crypto.

75% of crypto owners view it as an investment, a record high

According to a 2023 Pew Research Center survey, about 17% of American adults have owned cryptocurrency as of 2023. This is a slight increase from 2022, when 16% of U.S. adults reported having invested in, traded, or used cryptocurrency. However, the percentage of Americans invested in cryptocurrencies has remained relatively stable, even with the increased media attention on crypto.

Demographics of Crypto Owners

Several demographic factors influence the likelihood of owning cryptocurrency in the United States. Firstly, there is a gender disparity, with about 70% of crypto owners being men, despite men making up only 48% of the general population. Additionally, younger individuals are more likely to own crypto, with 41% of men and 16% of women aged 18 to 29 having invested in crypto, compared to 17% of women and 13% of men aged 50 and older.

Income level is another factor, with high-income earners disproportionately represented among crypto investors. Those earning $100,000 or more annually make up 25% of crypto owners but only 15% of the general public. Racial and ethnic disparities also exist, with a higher percentage of Black, Hispanic, or Asian Americans investing in crypto (21%-24%) compared to 14% of White Americans.

75% of Crypto Owners View it as an Investment

A record high of 75% of crypto owners view their holdings as an investment, according to The Motley Fool's 2024 Cryptocurrency Investor Trends Survey. This shift in attitude may impact the industry, as the initial appeal of crypto was its potential to become a global currency for secure payments. However, with financial institutions increasingly treating cryptocurrencies as an investment class, the perception of crypto as a purely functional currency is fading.

The survey also revealed that the majority of those likely to buy crypto in the next year already own some form of cryptocurrency or have exposure to Bitcoin through an ETF. This indicates that crypto is struggling to attract new investors beyond Gen Z and millennial men. The introduction of regulated Bitcoin ETFs may not significantly change this dynamic, as those most interested in these ETFs are already invested in crypto, while older individuals and women remain skeptical.

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