US crypto investors

A little while ago, I discussed a 2019 OECD survey amongst people in South East Asia on their motivations to invest in cryptocurrencies. At the time, I said that was the best study I know of, even though there might be differences in the motivations of investors in North America and Europe. Thanks to my readers, I have been made aware by another study from 2019 that was published recently and looked at US investors and their motivation to hold cryptocurrencies. And to me, it is striking how similar the motivations are.

The study in South East Asia found that investors in cryptocurrencies are predominantly male and interested in technology. They have a higher degree of financial literacy and learn more about cryptocurrencies. That higher degree of education about technology is a main driving force behind their investments.

In the US study, the results are eerily similar. The main investors are white men with a higher degree of financial literacy. Furthermore, they invest more time in researching cryptocurrencies before they invest in them, confirming that cryptocurrencies are assets that are not easy to understand and that require some education before people get comfortable investing in them. 

Another similarity between the South East Asia study and the US study is that cryptocurrencies are held as a long-term store of value. In South East Asia, the desire to save for retirement was a key driver to own cryptocurrencies. In the United States, saving for retirement is not. However, that may be because in the US, retirement savings vehicles such as IRAs and pension funds, are much more developed and established. But asked about their motivations to own cryptocurrencies and their time horizon, US investors said that they owned cryptos as a store of value that hedges against a possible decline in their savings and that on average owners of cryptocurrencies had a substantially longer investment horizon than investors who did not own cryptos.

In total, investors in cryptocurrencies are much more long-term oriented and sophisticated than many in the media make them out to be.

Average investment horizon of crypto owners and non-owners

Source: Bonaparte (2021).