Are you invested in bitcoin, or intrigued by the notion of investing in bitcoin? If you’re reading this article, chances are the answer to either of these questions is yes.
Bitcoin was introduced in 2009, and in the past several years has become a phenomena of sorts as the price of this digital asset soared into the stratosphere before crashing back to Earth. It has more or less been in recovery mode in 2019, though it’s still far from its former rarified heights (which is probably realistic—and healthy). Bitcoin was once seen as the domain digi-nerds and forward-thinking investors, but now has more or less entered the mainstream.
At least that’s the message from a new investor survey from Grayscale Investments and QB Research. Grayscale is a New York City-based digital currency asset management firm whose products include the Grayscale Bitcoin Trust (GBTC), which trades on the OTC market.
Naturally, Grayscale isn’t an impartial observer when it comes to conducting a study such as this, but this online survey of 1,100 U.S. investors paints a picture that people who are interested in bitcoin aren’t just crypto nuts or super-wealthy dabblers who can afford to a take a flyer on this newfangled asset.
According to the survey, roughly one-third of U.S. investors (a proportion the survey says represents more than 21 million people) would consider an investment in bitcoin. And while these folks are slightly more experienced and risk-tolerant than average investors, they basically resemble the general investing public in terms of age, income and even political affiliation.
Regarding that last point, 42% of bitcoin-interested investors identified themselves as Republican and 37% as Democrats, versus 41% GOP and 36% Democrats among those identified as “average” investors.
Among the survey’s takeaways is that 70% of bitcoin-interested investors said they’re parents and 49% make less than $100,000 a year. Meanwhile, 42% of these people consider bitcoin as both a short- and long-term investment.
That said, bitcoin still isn’t a must-have for the majority of investors. The survey found that 30% of respondents are neutral on bitcoin, and 34% aren’t interested in investing in it.
Furthermore, 75% of all investors and 68% of bitcoin-interested investors said that digital crime—i.e., hacking and fraud—is their top concern about bitcoin, followed by a lack of regulation.
That second point is a bit ironic because advocates of bitcoin and other digital currencies have long extolled the freedom from government oversight as one of the virtues of this asset class. Evidently, the broader pool of investors who are interested in bitcoin aren’t as enamored of this free-range concept because the survey found that 65% of all investors and 53% of people interested in bitcoin have concerns about an unregulated market.
Finally, 89% of survey respondents said they need more educational resources to get them up to speed with bitcoin, and more than three-quarters of them said working with a financial advisor would make them more comfortable with bitcoin (and presumably, digital assets in general).
That sounds like an opportunity for advisors to provide a value-add to their clients. Of course, advisors first need to get up to speed on this emerging asset class both from an investment and regulatory perspective. For compliance and other reasons, this can be a tricky area for advisors. But it seems inevitable that more investors will get interested in cryptocurrencies, which means digital assets will likely become a greater part of the advisor-client conversation.