Think about the typical cryptocurrency investor. What do you think comes to mind? Maybe someone young, tech-forward, and college-educated, with lots of disposable income. While this may have been held before, recent data indicates there needs to be more separation between today’s cryptocurrency investors and holders of any other asset.
A study published by the National Bureau of Economic Research found that cryptocurrency investors resemble the general population except for high-income early adopters. Holders can be found across income levels in proportions roughly similar to those with traditional assets; while there are always more of the latter, it’s generally not by much.
There is a similar pattern in demographics, with cryptocurrency investors identical to the general population. For example, Asians comprise 7% of the total sample of investors and 7.4% of cryptocurrency investors. Further, the median age in the model overall was 38.4, while the median age for cryptocurrency investors was 37.9, a difference of about 26 weeks. Gender is pretty even, too, with men making up 49.3% of the overall sample and 49.4% of cryptocurrency investors. There were also little to no differences in educational level. While those with a college or graduate level education were slightly more likely to hold cryptocurrency, and those with a high school education somewhat less, the variances are measured in fractions of a percent.
Not that cryptocurrency investors are no different at all from the general population. One factor that seemed to make a difference was whether or not someone gambles. The paper found that while gamblers make up 28.7% of the overall population, they make up 38.8% of cryptocurrency investors. This aligns with prior research from multiple sources, establishing connections between cryptocurrency trading and issues like problem gambling, as well as mental health concerns such as depression or anxiety. Anecdotal evidence within the cryptocurrency community has also highlighted this phenomenon.
Further, cryptocurrency investors tend to have slightly higher incomes (though not dramatically so) and somewhat more financial stability. Additionally, they are more likely to think of themselves as sophisticated investors (the paper defined “sophisticated” as “those who receive paycheck income from the top 200 finance firms,” which the researchers conceded was an imperfect measure).
Researchers also found that those more exposed to inflation are more likely to invest in cryptocurrencies.
Still, except for gamblers, these seem more detailed than demographic differences. The results are a marked contrast to another study in 2021. Using data from a cryptocurrency trading platform, the study found that men made up 79% of users and those under 30 made up 64%, implying that much has changed in the cryptocurrency landscape in just a short period.
“Our results suggest that crypto investors are not as dissimilar from equity investors as some might believe,” the paper concludes. “Importantly for policymakers, the excitement of the last several years around this
new asset class did not seem to come at the expense of investments in more traditional assets.”