Grayscale investment: Bitcoin “high light moment” has not yet arrived


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In October, Grayscale Investment released the latest “Bitcoin Investor Research Report”, which is the second consecutive year that Grayscale, the world’s largest cryptocurrency asset management company, has conducted a survey of investors to explore their continuous changes in Bitcoin Attitudes and opinions. It is worth focusing on.

11 years since its birth, Bitcoin has become a hot topic of discussion among investors, consultants, financial institutions, service providers, regulators and policy makers. As more and more stakeholders pay attention to this new thing, there are a lot of questions worth studying, and studying these questions can help the whole world better understand cryptocurrencies and see how cryptocurrencies are integrated into existing ones. Global financial system-although all of this is at a very early stage.

2020 is the most unusual year.

With the global pandemic of the new crown epidemic, the economic recession has forced individuals, small businesses, enterprises and governments to make major changes in a short period of time. This has created innovation opportunities on the one hand, and on the other hand has caused economic difficulties and displacement. Under such drastic changes, compared with the results of the 2019 survey, investors’ interest in safe-haven assets has increased significantly, which is actually not surprising.

The 2020 survey found that some trends in 2019 have continued, while some survey results are unexpected. No matter how you view Bitcoin, the most important thing is that we need to fully understand how investors view Bitcoin. Behind this lies investment trends and opportunities, as well as the challenges faced by new forces in the financial industry.

Investigation focus

1) 55% of American investors are interested in Bitcoin

Grayscale’s “Grayscale Bitcoin Investor Research Report” shows that American investors’ interest in Bitcoin is on the rise. More than half of U.S. investors are interested in investing in Bitcoin in 2020, and 36% of investors expressed their interest in 2019. Compared with the year of interest, there is a significant increase.

Grayscale 2020 Investor Research Report: Bitcoin “highlight moment” has not yet arrived.

2) Most Bitcoin investors have deployed Bitcoin in the past 12 months

Among the respondents who participated in investing in Bitcoin, 83% made new investments in the past year, which shows that cryptocurrencies are becoming more and more attractive in modern investment portfolios.

3) The COVID-19 pandemic is the main driving factor for Bitcoin investment in 2020

38% of Bitcoin investors have invested in the past four months, and nearly two-thirds of them said that the development of the new crown epidemic is the key factor in their decision to do so.

Bitcoin is going mainstream

In the beginning, Bitcoin was only a niche investment, but now it is moving towards the mainstream.

According to the latest survey in 2020, the market size of potential Bitcoin investors has reached 32 million, compared with only 21 million a year ago. This year, 62% of investors said they were “familiar” with Bitcoin, compared with 53% in 2019.

In addition, nearly half of the respondents expect that by 2020, cryptocurrencies will be regarded as mainstream currencies. The average age of investors interested in Bitcoin is 42 years old. Except for a slightly younger age, there is no essential difference between the demographic structure of investors interested in Bitcoin and the investment group of traditional finance, while investors who are not interested in Bitcoin The average age is 49 years.

This data shows that Bitcoin is going mainstream.

Bitcoin investor profile in 2020

From 2019 to 2020, the number of investors who expressed interest and familiarity with Bitcoin is increasing significantly, but the common characteristics of investors have not changed.

Compared with investors who are not interested in Bitcoin, Bitcoin investment is more of young men with jobs. Investors who are interested in Bitcoin claim that they have a higher risk tolerance and are more likely to actively seek new investment opportunities. These investors hold multiple investment accounts and are used to reading financial news.

In addition, the more formal education investors receive, the more likely they are to invest in Bitcoin: 29% of investors with a graduate degree have invested in Bitcoin, while only 22% of investors with an undergraduate degree have invested Only 17% of investors without a university degree have made an investment.

Grayscale 2020 Investor Research Report: Bitcoin “highlight moment” has not yet arrived. Among 23% of investors who have invested in Bitcoin, male investors are about twice as large as female investors. However, 47% of female investors surveyed stated that they would consider Bitcoin investment products (a slight increase from 43% in 2019), and 66% of female investors interested in Bitcoin said that if they can see Bitcoin With a strong track record, they are more open to investment.

Among Bitcoin investors, investors between the ages of 25 and 34 account for the largest proportion. This shows that what is interested in Bitcoin assets is an age group that has not yet entered the best age to make money.

Incentives to invest in Bitcoin

In 2019, 59% of respondents said that their way of investing in Bitcoin started with a small amount and increased over time. By 2020, this number will rise to 65%.

The belief that Bitcoin is a long-term good investment target is an important factor that continues to promote investors’ interest in Bitcoin. In 2019, 51% of investors viewed potential growth as an incentive. A year later, 59% of investors thought so.

The impact of COVID-19 on Bitcoin investment decisions

The new crown pneumonia pandemic has shocked all industries and companies around the world, and the investment field is no exception.

In the past four months, about two-thirds of respondents who have invested in Bitcoin stated that COVID-19 has affected their decision to invest in Bitcoin. In August 2020, JPMorgan analysts discovered that some retail investors, especially younger investors, have allocated excess liquidity to Bitcoin under the trend of the crypto asset pandemic. When asked whether the new crown pandemic has prompted them to learn about Bitcoin, investors who believe that COVID-19 has increased the attractiveness of Bitcoin are three times as many investors who believe that they have reduced their interest in Bitcoin.

Respondents claimed that Bitcoin has the same attributes as safe-haven assets. Bitcoin’s scarcity, verifiability, lack of relevance to the global market, and the fact that it is not controlled by government agencies make Bitcoin similar to traditional safe-haven investments. This is one of the reasons why they choose Bitcoin.

It is worth noting that the oldest age who considers Bitcoin as a safe haven is between 35-44 years old. This group of investors has survived three recessions, and traditional defensive tools such as real estate, defensive stocks and bonds have lost their appeal as a hedge against market recessions. With confidence in traditional safe-haven assets being tested, investors are actively looking for suitable alternatives.

The opportunity that financial advisors bring to Bitcoin

The guidance of a trusted financial advisor usually brings a lot of customers and traffic. 31% of respondents and 40% of investors said they are considering Bitcoin. If their financial advisor recommends Bitcoin, they will be more likely Invest in Bitcoin.

For financial advisors, the opportunity to cater to these investors is easier than they thought. Nearly half of the respondents (47%) indicated that they would consider cooperating with financial advisors to develop bitcoin investment products. These professionals have a great opportunity to help interested clients incorporate bitcoin investment products into their investment portfolios.

Among those who are already interested in Bitcoin, 75% of investors said that if their financial advisers can directly provide them with investment options, they will have an incentive to consider investing—the same is true for more than 55% of investors.

Therefore, consultants who spend time learning cryptocurrency on their own will have the opportunity to contact young investors seeking information and guidance on Bitcoin. This expertise can help consultants build relationships with clients who are early in their careers who have not yet reached their full income potential.

Bitcoin is gaining momentum, but resistance still exists

Although there are many signs that investors are becoming more and more interested in Bitcoin, it still faces some challenges. In particular, certain demographic groups have consistently expressed a lack of interest in Bitcoin investment products.

In the 55-64 age group (the oldest group in the survey), only 40% of investors are familiar with Bitcoin-the lowest percentage of all age groups. In addition, only 30% of respondents aged 55 to 64 said they would consider Bitcoin investment products.

70% of respondents said that because Bitcoin is digital, it is vulnerable to cyber attacks. However, it turns out that as long as the security measures are right, even the most sophisticated attackers cannot break the Bitcoin network.

63% of investors also expressed concern about Bitcoin’s regulatory status, and 62% of investors mistakenly believed that the government did not regulate Bitcoin. In fact, U.S. and global government agencies have regulated many aspects of the Bitcoin ecosystem—especially trading. In recent years, regulators, financial institutions, and investors have all taken measures to enable Bitcoin investment products to be adopted in a regulated environment.

In the United States, the Internal Revenue Service (IRS), the Commodity Futures Trading Commission (CFTC), the Financial Crimes Enforcement Network (FinCEN), the Securities and Exchange Commission (SEC) and the Federal Reserve have all recognized and resolved the Bitcoin problem in some way. As of 2019, 32 states have introduced or passed legislation on Bitcoin.

Final thoughts

In just one year, Bitcoin seems to be generally accepted by the investing public. More than half of American investors have expressed interest in investing in Bitcoin. There are nearly 32 million households in the U.S. market, each with more than $10,000 in investable assets. As the stock market continues to fluctuate, the once strong correlations between various asset classes have begun to collapse. Under this background, Bitcoin seems to be gaining continued attention and upward momentum.

Decentralized cryptocurrencies are becoming more and more popular, and financial advisors are playing an increasingly important role in this ecosystem, and may play a greater role in the future. Statistics show that the cryptocurrency revolution has been largely driven by a new generation of well-educated investors, who will use a large amount of online information to screen their investment targets.

At present, most Bitcoin investors, or potential investors, have not yet reached the age of gold income, plus the $68 trillion worth of wealth transfer that will be carried out in the next 25 years. For those investors who are bullish on Bitcoin for a long time, this It is a huge opportunity. In the past ten years, cryptocurrencies have made great strides, but the growing momentum of investor interest in this crypto asset class shows that the bright moment of Bitcoin has not yet arrived!