A recent report suggests that, in spite of the fact that high net worth individuals (HNWIs)are growing more wealthy all the time, these investors are not yet taking part in the cryptocurrency market to the same degree as other demographics. The recent Capgemini World Wealth Report 2018 suggests that one of the reasons for this hesitation to adopt one of the trendiest new investment areas in the financial world may have to do with the wealth management industry.
29% Have 'High Interest'
The report, cited by Bitcoinist, suggests that 29% of millionaires have a “high degree of interest” in entering the cryptocurrency space as investorswhile another 27% “sit on the fence.” Altogether, then, a full 56% of HNWIs are either prepared to invest in digital currencies now or could likely be swayed to do so in the near future. Some 44% of HNWIs have expressed a lack of interest in the space.
Given the breakdown above, one might expect that a relatively large proportion of millionaires would be active as cryptocurrency investors. However, only about a third of the more than 2,600millionaires included in the study have received information about investing in cryptocurrencies from their wealth managers.
Caution: Necessary or Overblown?
Wealth managers may still be largely cautious about the long-term health of the digital currency space, or perhaps they lag behind individual investors when it comes to their understanding of cryptocurrencies and their potential. While the traditional financial world has remained broadly hesitant when it comes to digital currencies, there have been some signs that mainstream investors and some financial institutions are warming up to the concept, or at least to the blockchain technology that supports the cryptocurrency space.
Wealth management firms are typically focused on traditional and institutional investing practices, meaning that they are less likely to be at the vanguard of cryptocurrency investment opportunities. Nonetheless, Capgemini believes that a shift may be approaching: The report suggests that “the strong demand for information on cryptocurrencies from younger HNWIs is likely to force wealth management firms to at least develop and offer a point of view during the months ahead.”
The report also indicates that investment returns for HNWIs are above 20% as of last year, marking the second year in a row that this demographic has grown substantially wealthier.
Investing incryptocurrenciesand Initial Coin Offerings ("ICOs") is highly risky and speculative, and this article is not a recommendation byInvestopediaor the writer to invest in cryptocurrenciesor ICOs. Since each individual's situation is unique, a qualified professional should always be consulted before making any financial decisions.Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein. As of the date this article was written, the author owns bitcoin and ripple.
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The report, cited by Bitcoinist, suggests that 29% of millionaires have a “high degree of interest” in entering the cryptocurrency space as investors while another 27% “sit on the fence.” Altogether, then, a full 56% of HNWIs are either prepared to invest in digital currencies now or could likely be swayed to do so in ...
Why should people not invest in crypto? ›
Securities and scams
Some platforms are more secure than others, and some newer coins could be a higher scam risk than those more established. There is also no protection or insurance for lost or stolen cryptocurrencies, so always research thoroughly before taking action.
Why are people so against crypto? ›
Critics, however, see crypto assets as not merely inherently worthless but a front for crime, scams, and gambling. They also point to their dizzying volatility.
How many people are millionaires because of crypto? ›
In an inaugural Crypto Wealth Report, Henley & Partners sheds light on this intriguing subject, revealing that there are currently 88,200 crypto millionaires globally. Who are they, and what assets do they prefer? This article delves into the prospects, challenges, and realities of crypto millionaires.
Do billionaires use crypto? ›
How Many Billionaires Own Crypto? There are 16 cryptocurrency billionaires in Forbes' ranking of billionaires. Sam Bankman-Fried is still on the list as the seventeenth, but Forbes lists the ex-CEO of FTX with no wealth. 4 There are likely many more billionaires who own crypto, but most do not publicize their holdings.
What cryptocurrency are billionaires buying? ›
As Bitcoin goes increasingly mainstream, it is drawing the attention of more billionaire investors. Mass buying by billionaires could lead to a supply squeeze, sending the price of Bitcoin soaring. As billionaire hedge fund managers boost their exposure to Bitcoin, it could lead to unpredictable outcomes.
How much does the average person invest in crypto? ›
Most investors in crypto have only small holdings. Cumulating transfers at the individual level, the median gross amount transferred to crypto accounts over the period 2015 through the first half of 2022 was approximately $620.
What percent of Americans invest in crypto? ›
Cryptocurrency awareness and ownership rates have increased to record levels: 40% of American adults now own crypto, up from 30% in 2023. This could be as many as 93 million people. Among current crypto owners, around 63% hope to obtain more cryptocurrency over the next year.
Is crypto worse than stocks? ›
A broadly diversified stock portfolio generally presents a safer option than cryptocurrencies because of their intrinsic value and history of delivering solid long-term returns. Cryptocurrencies may hold greater potential for outsized gains, but come with significant risk.
Why is crypto not the future? ›
Volatility and lack of regulation. The rapid rise of cryptocurrencies and DeFi enterprises means that billions of dollars in transactions are now taking place in a relatively unregulated sector, raising concerns about fraud, tax evasion, and cybersecurity, as well as broader financial stability.
Will a U.S. CBDC replace cash or paper currency? The Federal Reserve is committed to ensuring the continued safety and availability of cash and is considering a CBDC as a means to expand safe payment options, not to reduce or replace them.
Is everyone losing money in crypto? ›
A higher percentage of cryptocurrency investors have lost money than made it. 38% of Americans who've held a form of the currency say they've sold it for less than when they bought it, versus 28% who say they made a profit. Only 13% say they broke even.
Does Warren Buffett own Bitcoin? ›
Perhaps the most famous value investor of all time, Warren Buffett is strongly against Bitcoin and other cryptocurrencies, saying, "You can't value Bitcoin because it's not a value-producing asset." Buffett and his holding company Berkshire Hathaway Inc. have been well-known for their investments in stable and ...
How likely is it to get rich from crypto? ›
The truth is that you can get rich by investing in crypto, but making money in crypto is the same as making money with any type of investment. To become rich, you have to do your research, work with a financial advisor, follow specific markets and make trades at the right time.
Which crypto has made the most millionaires? ›
According to the latest Crypto Wealth Report, there are more than 88,000 people around the world who have become crypto millionaires. And (perhaps no surprise here) the one crypto that is responsible for 40,500 of those millionaires is Bitcoin (CRYPTO: BTC).
What percent of people get rich from crypto? ›
The firm's report on Tuesday says says 88,200 people have crypto assets worth at least $1 million — less than 1% of overall crypto users. Some 40,500 of them hold their investments in bitcoin, just under 46% of the total.
How much of your wealth should be in crypto? ›
Most financial experts recommend limiting crypto exposure to less than 5% of your total portfolio. Crypto is considered a high-risk asset class. Limiting allocation helps manage overall volatility and risk. Those new to crypto investing may start with 1% to 2% as an introduction.
