The four personalities that make up the crypto community
We recently commissioned a survey of 2,000 crypto owners in the U.S. and UK to find out more about who they are and their reasons for owning crypto. A clear pattern emerged from the data; there are four types of crypto owner, each with their own habits and motivations for acquiring crypto.
The thrill seekers
For a significant percentage (21%) investing in crypto is all about the fun of investing and the kicks they get from seeing their investments turn a profit. And like a true gambler, they don’t need to know much about what they are taking a punt on to experience the thrills. In fact, a quarter of all crypto owners describe both their knowledge of cryptocurrencies (26%) and their confidence in their trading abilities (25%) as low.
When we asked crypto owners about being paid their salary into crypto and having it as their main source of income, there are those that both would and would not take up the offer that point to crypto ownership being for thrills as the main reason. Of the 55% of owners that would like to be their salary in crypto, a fifth (20%) said that the excitement of not knowing how much they would get paid would be a reason for doing so. But on the flipside, 17% of those that don’t want to be paid their salary in crypto say they only own crypto for fun.
The professional day traders
At the opposite end of the spectrum to the thrill seekers are the day traders. These crypto owners are not in it for the excitement; instead they are clinical in their approach to acquiring and trading cryptocurrencies.
These traders are of course very active; 20% of the crypto community is acquiring or investing in crypto daily. And for 12% of the community crypto is not only about how frequently they trade, acquiring crypto is also their primary source of income/full time job. And that is why it is only a lack of resources that is holding them back from investing even more into crypto; overall, for 29% of the community having more capital to invest is the factor that would convince them to own more crypto.
Typically the professional day traders don’t have any doubts about owning crypto or their abilities as investors; of those that say they have never had doubts about crypto one third (33%) say the reason for this is that they trust that they know what they are doing and therefore have no reason to have doubts.
Separate from the day traders are the investors that are in it for financial gains, but are much more passive in the way they manage their investments. These crypto investors are known in the community as HODLers (an anagram of HOLDers i.e. investors that keep hold of their crypto) and are part of the 44% of crypto owners that are buying or investing in crypto once a month or even less frequently.
Overall, a fifth (20%) of crypto owners say that their primary motivation for trading is to diversify their long-term investment portfolio. These investors are much more severely impacted by price fluctuations; for day traders the volatility of crypto is often an attractive quality, but for HODLers a price drop is much more likely to have them considering their positions.
For HODLers (20% of all traders) crypto demonstrating long-term gains and steadily rising in value is the thing that would convince them to invest more of their assets into crypto. And despite being passive investors that won’t stop them cashing out their crypto if there is more money to be made elsewhere; overall 21% of traders that say they have had doubts about owing crypto have sold some of their crypto assets due to it falling in value.
The tech evangelists
But, perhaps surprisingly, it isn’t those that are searching for financial benefits or entertainment that make up the largest percentage of the crypto community. When asked about their primary motivation for trading 25% of crypto owners point to their belief that crypto is the future of money as the main reason.
And it is not just these tech evangelists that believe in the transformative qualities of crypto. Overall, 54% of the community are already convinced that cryptocurrencies are the future of finance (vs. just 19% that do not) and half (49%) even believe that everyone will own cryptocurrencies in five years’ time.
But for the true believers in the power of crypto, the time is now. In fact, 21% of those that want to switch all of their finances to cryptocurrencies want to do so because they want to make all their payments using crypto.
To find out more about who is acquiring crypto download Inside the crypto community: Plotting the route to mass adoption now.