Cryptocurrency, and the purchase of digital assets in general, has seen rapid growth in recent months, spurred on during the COVID-19 pandemic by investors in lockdown with money and free time on their hands.
In fact, digital asset marketplace Bakkt found in its U.S. Consumer Crypto Survey that 48% of American investors invested money in cryptocurrency during the first half of 2021. Another 32% of respondents who haven't invested in virtual currency yet plan to do so in the next six months.
Respondents see value in cryptocurrency as a long-term investment
As younger investors learn more about personal finance, almost three-fourths of them report feeling confident in their investing decisions. Perhaps this is why they're now trying their hand at cryptocurrency, much more so than their older counterparts.
Bakkt revealed that nearly 2 in 5 (37%) of investors ages 18 to 44 who haven't yet invested in cryptocurrency are "somewhat" or "very interested" in doing so, compared to those in the 45 to 60 age range (28%) and the 60+ range (19%).
This may be due, in part, to the long-term return on investment of the digital currency — which 28% of respondents listed as the biggest appeal of this investment. Other attributes — such as lack of fees, lack of centralized control, ease of access and fear of missing out — trail behind at about 15%.
The survey also showed that those who already own cryptocurrency have varying plans for their investments, including those who will:
- Have it accumulate value as a long-term investment (58%)
- Sell it when they can make a short-term profit (43%)
- Use it to make purchases online (24%)
- Use it to make purchases in person (12%)
- Transfer it to someone else (11%)
Important questions remain for would-be cryptocurrency investors
Of course, the novelty of cryptocurrency and lack of knowledge about this new type of investment raises concerns for some investors. For instance, respondents report challenges such as:
- Too much volatility (32%)
- Lack of clarity on where to start (24%)
- Lack of trust in third-party exchanges or brokers (18%)
- High prices (11%)
Others have little knowledge about cryptocurrency and the blockchain technology that drives it (35%), while a similar percentage have no knowledge about it at all (35%).
Still, nearly a third of consumers (30%) say they are "very" or "somewhat" confident and trusting of this new digital asset. If and when they do decide to cash in on the trend, many say they will choose a platform largely based on the cost and fees involved (27%), while other respondents prefer a platform that is easy to use (26%).
Methodology: Bakkt commissioned and conducted an online survey of over 2,000 American consumers in July 2021. Survey data has been weighted for age, education, geography, race and sex according to the Census Bureau's American Community Survey to align with the demographics of the U.S.