What Americans are Buying Bitcoin? And Why?
How is Elon Musk Helping Crypto?
Bitcoin recently reached an all-time high price of over $48,000 – far beyond the expectations of anyone except BTC enthusiasts. In the past few weeks, electric car producer, Tesla, bought $1.5 billion worth of BTC, whilst Elon Musk tweeted about it optimistically. Media attention like that confers a much-needed legitimacy on BTC. If it’s good enough for Elon Musk, it must be good enough for his 35.5 million Twitter followers and Tesla shareholders. Millions of people who may have heard of BTC over the last few years are coming to see it as a legitimate place to put some money.
As if more endorsements were needed, Mellon Bank of New York, one of Wall Street’s largest and stodgiest asset custodians, have just announced that they will start accepting BTC on behalf of their clients. Similarly, Morgan Stanley have stated that their wealth management clients should consider parking a small percentage of their asset base in BTC or other cryptocurrencies. Morgan Stanley manages about $1.24 trillion of client assets, so 1% of that amount moving into BTC would increase its total market capitalization by at least $10 billion. That’s a major move of assets from one sector to another. Morgan Stanley wasn’t the only one; just a very prominent player who attracted lots of media attention.
All of this high profile buying generates media attention that spills into everyday life in a way that, taken together, makes Bitcoin seem like a fixture of everyday life, and therefore a natural and legitimate investment option. There’s an enduring, steady sea change underway in the attitude of the general public towards Bitcoin that promises to move cryptocurrency out of the dark corners of the Internet into the limelight.
Who is Buying Crypto and Following the Trend?
Research by Wirex suggests that, up to now, the typical American Bitcoin buyer has been a man under the age of 40. Techno savvy or at least literate, this (usually) single guy has some money to spare and has been active in trading BTC as well as other cryptos. He’s usually risking a relatively small amount of money.
However, this conflicts with a recent study conducted by Wirex and the Stellar Development Foundation among their respective user bases. In Europe, BTC buyers are older - about 57.2% are over 45, with the largest number of respondents between ages 54-65. In the APAC region, 45% of buyers were over 45 years of age.
Interestingly, about 26.1% of women aged 45-55 invested in crypto vs only 14.2% of men in the same age bracket of respondents. That’s a surprising percentage since the number of women owning cryptocurrency outnumbers men in that age bracket. Nevertheless, in all other age brackets, men dominate the statistics. According to Finder, women, in the US at least, tend to be less skeptical of crypto than men. 24% of US males surveyed said they think crypto is a scam and the same number thought it is a bubble, whereas only 13% and 10% of women, respectively, think that.
What Other Factors Drive Crypto Adoption?
What’s even more interesting about that demographic shift is the attitudes these buyers bring with them. Depending on the region of the world where the responders were located, the factors driving crypto adoption can change. In some parts of the world, political instability is a major driver. In others, lack of faith in established governments or national fiat currencies can encourage crypto purchases. In the USA for example, the number one political affiliation for crypto buyers is libertarian. Libertarian thinkers respond to cryptocurrencies like Bitcoin and Ethereum for their decentralized approach and lack of government oversight and intervention.
1 in 3 millennial investors aged 18-34 would prefer to hold Bitcoin over government bonds, representing the level of skepticism about the creditworthiness of the US government in the long run. Furthermore, a quarter of them would prefer to hold Bitcoin over stocks.
How do Crypto Buyers Decide What to Buy?
With over 3,000 cryptocurrencies available, how does anyone know what to buy and why? 42% of respondents of a survey by Finder said they chose their cryptocurrency because on a referral from friends and associates who had made money on that transaction.
In the US, there are approximately 15.3 million crypto owners in the US today. That’s an estimate of course, and that’s not the surprising number. According to a Harris Poll survey in 2019, 67.9 million US consumers anticipate themselves being somewhat or very likely to purchase cryptocurrency in the next 5 years, representing a growth of 23%. Half of those respondents were under 34 years of age, indicating that a younger consumer has a profoundly different view of crypto than their older peers.
What's Next for Crypto in the US?
The race to capture this fast-growing market is on. Numerous companies are offering an on-ramp to cryptocurrency trading to accommodate the needs and wants of younger consumers in the hope of capturing them for a lifetime. Paypal, Square, Wirex and others are all lining up to capture this market segment. And what does that younger crypto enthusiast want from their service provider? Fast, easy, and free.
Wirex is set to launch in the US in September, bringing with them their industry-leading crypto services and giving Americans seamless access to crypto.