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Cryptocurrencies have had a good year so far. Their buzz, awareness and use – as well as their volatility – have increased throughout 2021, just as several mainstream financial services institutions have announced plans to offer cryptocurrency services to the public.
A new analysis from Morning Consult shows, in deep demographic detail, who is in this large pool of interested consumers and how these financial services leaders should react: although Bitcoin owners have turned whiter in the past two years as a group, the group is not just rich white men. In fact, crypto services could be an opportunity to serve more diverse and underserved communities.
Cryptocurrencies are becoming common with some key audiences. According to a recent Morning Consult poll, 1 in 5 American adults say they own a cryptocurrency. Morning Consult Brand Intelligence shows that 17% of American adults specifically own or use Bitcoin. Familiarity with cryptocurrency has increased by nearly 10 points since the start of 2021, with Gen Z adults, Millennials, and Hispanic adults posting the highest familiarity gains.
The general population’s familiarity with such a complex asset class is particularly impressive, but to further remove barriers to investing in cryptocurrency, financial services institutions should capitalize on this existing familiarity and isolate areas where they can better educate consumers through demographics and transform investing familiarity.
Compared to two years ago, however, the Bitcoin community has become increasingly homogeneous in several ways. Bitcoin owners, which include those who own a portion of Bitcoin, have become richer, younger, and whiter since 2019, when Morning Consult began tracking Bitcoin on the Brand Intelligence platform, the company’s flagship platform that tracks daily consumer attitudes for over 4,000 brands in 15 countries and counting.
However, some demographics have not changed: Bitcoin owners are as likely to be male as they were two years ago, almost 70%. The share of Bitcoin owners who report being Hispanic has also remained stable at around 1 in 4, higher than the general population, which is currently 16%.
The homogenization is likely due to the extreme volatility of Bitcoin and the increased negative buzz of cryptocurrency in recent months; high-income adults and young adults may have higher risk thresholds and more easily afford to invest in volatile assets, while those who viewed Bitcoin as a long-term stable vehicle for wealth creation may have been deactivated.
Although the demographic makeup of Bitcoins is predominantly white, several groups have a disproportionate representation compared to the US population. However, only visualizing the demographics of current Bitcoin owners misses Bitcoin’s share of ownership and purchasing considerations among specific populations.
Examining Bitcoin ownership among different ethnicities, income levels and generations reveals a persistent and enthusiastic interest among minority and younger populations. Namely, Hispanic and black adults are more likely to own Bitcoin and consider buying Bitcoin than white adults or adults of a different race or ethnicity, and are also more likely to ‘consider buying it in the future. Contrary to some misconceptions that all Bitcoin owners are rich, low-income respondents are about as likely to own Bitcoin as wealthier adults.
The big takeaway: Overall, around a third of adults say they would use cryptocurrency services such as buying, selling or storing cryptocurrency through a bank, or getting advice. of cryptocurrency from a financial advisor. (Notably, this is higher than the share that currently owns a cryptocurrency). Hispanic and black adults express an even higher interest in these services than white adults. Baby boomers are the least interested in crypto services, and they are also the least likely to own or be interested in cryptocurrency in general.
The broad public interest in cryptocurrency services means that there is an opportunity for banks not only to better serve their existing customers, but also to attract new, potentially underserved customers. It is the latter that could be considered by traditional financial institutions if they are not specific to engaging with certain communities with crypto services.
Low-income American, Hispanic and black adults are more likely to be unbanked or underserved by traditional financial institutions, a persistent trend that many banks pledged to address last year. The high ownership and interest in cryptocurrencies among these communities could be a starting point for banks, wealth management companies and other vendors to build long-term relationships and follow through on their commitments. minimize inequalities.
Traditional financial institutions will likely have a long way to go in offering cryptocurrency services to the general public, as they determine regulatory considerations and also assess asset volatility. But as they develop their strategy, they should be aware of the demographics of cryptocurrency owners and those who wish to become one, and educate all interested groups about cryptocurrency – or risk doing so. miss out on a great opportunity to better serve a wide range of consumers.
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