Who Knows Crypto?

5/1/2021

Cryptocurrencies have been around since 2009 when Bitcoin was introduced to the world.  This investment sector is lacking regulation and is often lacking in liquidity, but there is a very loyal and growing fanbase of investors for this sector.  Whether it be Bitcoin, Litecoin, Ripple, Dogecoin, or Ethereum, investors need to ensure they know what they are investing in and the potential volatility.  Despite this investment segment being around for 12 years, there may still be a lack of understanding or broad interest.

What exactly is cryptocurrency?  It is currency or a form of payment that is completely digital, and mostly uses technology known as blockchain to assign ownership for each unit of currency.  There are over 6,700 different cryptocurrencies traded publicly.  Cryptocurrencies are not regulated by central banking, so it is not going to have a decline in value as a result of inflation.  This investment segment is very volatile so it should be considered with great caution.

According to Spectrem Group’s recent research, nearly a quarter of investors (24 percent) have at least some understanding of cryptocurrencies.  That percentage increases to 57 percent among Millennials, and 39 percent among Gen X investors.  Among Millennials only 11 percent will acknowledge they have no understanding of the concept.  Knowledge is highest among those investors at the highest wealth level, $15mm-$25mm in net worth, with 64 percent having at least some understanding of cryptocurrencies.  Forty percent of those investors who consider themselves to have an aggressive risk tolerance have some understanding of cryptocurrencies. 

Cryptocurrencies have been around since 2009 when Bitcoin was introduced to the world.  This investment sector is lacking regulation and is often lacking in liquidity, but there is a very loyal and growing fanbase of investors for this sector.  Whether it be Bitcoin, Litecoin, Ripple, Dogecoin, or Ethereum, investors need to ensure they know what they are investing in and the potential volatility.  Despite this investment segment being around for 12 years, there may still be a lack of understanding or broad interest.

What exactly is cryptocurrency?  It is currency or a form of payment that is completely digital, and mostly uses technology known as blockchain to assign ownership for each unit of currency.  There are over 6,700 different cryptocurrencies traded publicly.  Cryptocurrencies are not regulated by central banking, so it is not going to have a decline in value as a result of inflation.  This investment segment is very volatile so it should be considered with great caution.

According to Spectrem Group’s recent research, nearly a quarter of investors (24 percent) have at least some understanding of cryptocurrencies.  That percentage increases to 57 percent among Millennials, and 39 percent among Gen X investors.  Among Millennials only 11 percent will acknowledge they have no understanding of the concept.  Knowledge is highest among those investors at the highest wealth level, $15mm-$25mm in net worth, with 64 percent having at least some understanding of cryptocurrencies.  Forty percent of those investors who consider themselves to have an aggressive risk tolerance have some understanding of cryptocurrencies. 

Understanding an investment is one thing, actually being interested in the investment as an investment option is what will make the difference in an investment portfolio.  Interest in investing in cryptocurrencies is low among all wealth levels.  In contrast, 41 percent of Millennials are interested in investing in cryptocurrencies.  These investments are available through an online platform that has very little regulation. 

Due to the lack of regulation, liquidity, and volatility, this investment is best to be only a small portion of their net worth into this investment option.  Cryptocurrencies are not going away any time soon.

The culture surrounding purchasing and owning a cryptocurrency is still somewhat of a mystery to most investors, so it is critical to speak with a financial professional about potentially investing into any cryptocurrency investment.              
















































Understanding an investment is one thing, actually being interested in the investment as an investment option is what will make the difference in an investment portfolio.  Interest in investing in cryptocurrencies is low among all wealth levels.  In contrast, 41 percent of Millennials are interested in investing in cryptocurrencies.  These investments are available through an online platform that has very little regulation. 


Due to the lack of regulation, liquidity, and volatility, this investment is best to be only a small portion of their net worth into this investment option.  Cryptocurrencies are not going away any time soon.

The culture surrounding purchasing and owning a cryptocurrency is still somewhat of a mystery to most investors, so it is critical to speak with a financial professional about potentially investing into any cryptocurrency investment.