In recent weeks, cryptocurrencies have been somewhat volatile leading many to question the future of this relatively new, but increasingly popular, investment type.  Are cryptocurrencies merely a trend or an important component of the portfolios of affluent investors?

Spectrem Group recently completed research with investors with $100,000 to $25 million of net worth and asked about their familiarity with cryptocurrencies, whether they currently own crypto and their intentions for the future.

While only 12% of wealthy investors are currently invested in cryptocurrencies, almost have 49% are familiar with cryptos.  Only 15%, however, are likely to invest in crypto in the next six months (but that might bring the total to almost a quarter of investors holding cryptos!)

There are significant differences in the likelihood to own or invest in crypto based upon age and wealth level.  Younger investors are much more likely to already own and to consider investing in crypto than older investors.  As you can see below, 38% of Millennials currently own crypto and 46% are likely to invest in the next six months.  The wealthiest investors, those with $10 to $25 million of net worth, are also more likely than others to own crypto with 22% currently owning crypto and 28% planning on investing in crypto in the future.

 

Financial advisors can no longer ignore cryptocurrencies.  Each advisor should have a cryptocurrency expert on their staff or easily available.  Additionally, advisors need to be able to discuss with investors whether crypto should or should not be part of their portfolios.  These investments are not going to disappear in the near future and will increasingly become an important discussion item with investors.