Study: Over 50 Million Americans Likely to Buy Crypto in the Next Year

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14% of American adults — roughly 21 million people — own cryptocurrency, according to a report from Gemini, a cryptocurrency exchange. New research from The Ascent, a Motley Fool service, found that over 20% of American adults that have never owned cryptocurrency — over 50 million Americans — are likely to buy crypto in the next year.

What else does the average American adult think about cryptocurrency?

In May 2021, The Ascent surveyed 2,000 American adults about cryptocurrency. We asked, whether they understand blockchain, where they get information about cryptocurrency, what tools they use to invest in crypto, and more.

We found that interest in buying cryptocurrency among American adults continues to grow, but a lack of understanding is a major barrier to investment.

Key findings

  • Interest in cryptocurrency continues to grow: Over 51% of Americans who own cryptocurrency bought for the first time within the last 12 months. 22% of Americans that have never purchased cryptocurrency are likely to buy in the next year.
  • Lack of understanding is a barrier for new investors: 29% of people who had never bought cryptocurrency say not knowing what to do with it prevents them from buying. 20% say they don’t understand how to buy it. 24% of all American adults don’t understand how cryptocurrency works at all.
  • Bank integration and rewards are intriguing: 70% of American adults would consider buying (or buying more) cryptocurrency if they could store it in their primary bank account. 65% would consider signing up for a credit card that offered rewards or cash back in crypto.
  • Investors turn to specialized sources of information: 37% of American adults get information on which coins to buy or sell from cryptocurrency news websites.
  • Coinbase is dominant: 67% of American adults who own or have owned cryptocurrency have used Coinbase. No other exchange was used by more than 28% of respondents.
  • Time horizons are short: 65% of Americans who own or have owned cryptocurrency typically sell within a year of when they purchased it.
  • Opinions on regulation are still being formed: 40% of American adults said they didn’t know enough about cryptocurrency to have an opinion on whether it should be regulated by the government.

Over half of Americans who own cryptocurrency bought for the first time within the last 12 months

Interest in buying cryptocurrency has surged in the last year, with 51% of crypto owners buying for the first time in that period.

Our data reveals that the percentage of American adults buying cryptocurrency for the first time has increased over the past five years.

Over 20% of Americans that have never bought cryptocurrency are likely to buy in the next year

Our results show that interest in cryptocurrency will remain strong over the next year.

20% of American adults who have never bought cryptocurrency say they’re somewhat likely to buy in the next year. And 3% say they’re very likely to buy.

Based on those numbers, another 56.7 million Americans are likely to buy cryptocurrency in the next year, more than tripling the current 21 million or so crypto owners in mid-2021.

How likely are you to buy cryptocurrency in the next year?

Percentage of cryptocurrency non-owners

Very likely

2.61%

Somewhat likely

19.61%

Somewhat unlikely

28.50%

Very unlikely

49.28%

Data source: The Ascent survey of 2,000 American adults, conducted May 6, 2021.

29% of non-crypto owners don’t know what to do with cryptocurrency

Not knowing what to do with cryptocurrency and not understanding how to buy it were the two most cited reasons for not buying cryptocurrency among respondents who had never purchased crypto.

Despite the growing popularity and value of crypto, the third most likely reason for not investing in cryptocurrency was having never heard of it.

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Respondents appear to have shrugged off the volatility and unique risks associated with cryptocurrency and embraced the rising valuation of major coins. Only 8% of American adults who have never purchased cryptocurrency said that was because they think it’s a bad investment.

In that same vein, very few respondents claimed that the main factor preventing them from buying cryptocurrency was that it’s too expensive or it’s too late to make a profit.

49% of Americans who have never owned cryptocurrency would consider buying if they could store it in their primary bank

Almost half of Americans would consider buying cryptocurrency for the first time if they could store it in an account at their primary bank.

Over 80% of those who own or have owned crypto say they’d consider buying more of it if they could store it with their bank.

While looping financial institutions into the cryptocurrency world would go against what many people think is a big advantage of crypto, there’s a lot of interest in it. We could see banks trying to cater to this market in the future.

65% of Americans would consider a credit card with crypto rewards

Americans are also intrigued by credit cards that provide rewards or cash back in the form of cryptocurrency.

Nearly 65% said they would consider signing up for a credit card with crypto rewards. Almost 50% of those who had never owned cryptocurrency said they would consider it, and nearly 80% of those who own or have owned cryptocurrency expressed an interest.

Mastercard recently announced that it has partnered with Gemini, a cryptocurrency platform, to release a credit card with crypto rewards.

It wouldn’t be a huge surprise to see more of these cards coming in the future.

40% of Americans would consider receiving part of their salary in cryptocurrency

Americans are more interested in crypto credit cards than they are in getting paid directly with cryptocurrency, but millions of people would still consider it.

Overall, just over 40% of Americans would consider receiving part of their salary in cryptocurrency and about 31% said they would consider receiving all of their salary in cryptocurrency.

Almost 60% of owners and previous owners of crypto would consider getting part of their salary in cryptocurrency.

Respondents who had never owned cryptocurrency were significantly less likely to consider getting any portion of their salary in crypto.

Integrating crypto into daily life

We asked survey respondents how they feel about further integrating cryptocurrency into their daily lives. Here’s how many of them said “yes” when asked if they would consider

. . . buying (or buying more) cryptocurrency if you could store it in an account with your primary bank?

  • Total: 70.37%
  • Owners/previous owners: 83.91%
  • Never-owners: 49.02%

. . . signing up for a credit card that provides rewards or cash back in cryptocurrency?

  • Total: 64.99%
  • Owners/previous owners: 79.60%
  • Never-owners: 41.96%

. . . receiving part of your salary in cryptocurrency?

  • Total: 40.84%
  • Owners/previous owners: 58.54%
  • Never-owners: 12.94%

. . . receiving all of your salary in cryptocurrency?

  • Total: 30.90%
  • Owners/previous owners: 44.86%
  • Never-owners: 8.89%

57% of Americans think those who haven’t invested in cryptocurrency can still make a profit

Most Americans (57%) think there’s still time for those who haven’t invested in cryptocurrency to make a profit, despite skyrocketing valuations.

Those who have never owned cryptocurrency are more optimistic — 72% of that group don’t believe they’ve missed the boat on making a profit from cryptocurrency.

On the other hand, over half of respondents that own or have owned cryptocurrency believe that non-investors have missed the boat.

Do you think people who haven’t yet invested in cryptocurrency have missed the boat or are too late to make a profit?

Percentage of owners/previous owners of cryptocurrency

Percentage of non-owners of cryptocurrency

Percentage of all respondents

Yes

52.16%

27.58%

42.62%

No

47.84%

72.42%

57.38%

Data source: The Ascent survey of 2,000 American adults, conducted May 6, 2021.

Roughly 9% of people who have bought cryptocurrency don’t understand how it works

Most American adults admit they don’t have a full understanding of how cryptocurrency works, despite it moving toward the mainstream.

24% of respondents said they don’t understand how cryptocurrency works at all. A slightly higher percentage reported understanding how cryptocurrency works a little bit. Just 22% claimed to understand how it works very well.

Respondents who own or have owned cryptocurrency reported higher levels of understanding compared to those who have never owned cryptocurrency.

However, 9% of those who own or have owned cryptocurrency said they don’t understand how it works at all. We recommend that before purchasing assets, investors educate themselves, especially in the case of new classes of assets like cryptocurrency.

Please rate your understanding of cryptocurrency

Percentage of owners/previous owners of cryptocurrency

Percentage of non-owners of cryptocurrency

Percentage of all respondents

I understand how it works very well

35.16%

2.48%

22.48%

I understand some of how it works

30.02%

12.03%

23.03%

I understand how it works a little bit

26.12%

27.58%

26.69%

I don’t understand how it works it at all

8.71%

47.45%

23.74%

I’ve never heard of cryptocurrency

10.46%

4.06%

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Data source: The Ascent survey of 2,000 American adults, conducted May 6, 2021.

About 20% of adults have never heard of blockchain or decentralized finance

Many cryptocurrencies rely on decentralized blockchain networks to validate transactions. These networks cut out typical financial middlemen like banks and brokerages and instead allow users to directly interact with each other. That creates a decentralized financial network that has been largely unregulated.

Despite the fundamental importance of blockchain and decentralized finance to many cryptocurrencies, our results suggest that consumers need more education.

Overall, about one-fifth of respondents said they didn’t understand blockchain and decentralized finance, and one-fifth said they had never heard of those concepts.

Notably, 6% of those who own or have owned cryptocurrency have never heard of blockchain and 14% say they don’t understand how blockchain works at all.

Those who have never owned cryptocurrency were more likely to report less or no understanding of blockchain and decentralized finance.

Please rate your understanding of blockchain technology

Percentage of owners/previous owners of cryptocurrency

Percentage of non-owners of cryptocurrency

Percentage of all respondents

I understand how it works very well

28.77%

3.79%

19.08%

I understand some of how it works

23.22%

7.06%

16.95%

I understand how it works a little bit

28.19%

13.73%

22.58%

I don’t understand how it works it at all

13.60%

36.60%

22.53%

I’ve never heard of blockchain technology

6.22%

38.82%

18.87%

Data source: The Ascent survey of 2,000 American adults, conducted May 6, 2021.

7% of those who own or have owned cryptocurrency have never heard of decentralized finance and 12% say they don’t understand it at all.

Please rate your understanding of decentralized finance

Percentage of owners/previous owners of cryptocurrency

Percentage of non-owners of cryptocurrency

Percentage of all respondents

I understand it very well

30.02%

2.88%

19.48%

I understand it some

26.04%

6.01%

18.26%

I understand it a little

25.37%

15.42%

21.51%

I don’t understand it at all

11.61%

32.68%

19.79%

I’ve never heard of decentralized finance

6.97%

43.01%

20.95%

Data source: The Ascent survey of 2,000 American adults, conducted May 6, 2021.

Two-thirds of cryptocurrency owners bought in as an investment; one-third think it will replace standard currencies

Most Americans who own or have owned cryptocurrency bought in as an investment, suggesting that they see it primarily as a vehicle to grow their wealth.

The second most popular reason Americans invest in cryptocurrency is for fun or as a hobby.

A sizable chunk of Americans, however, have bought cryptocurrency for reasons that one wouldn’t buy a stock or bond.

For example, over a third of those who own or have owned cryptocurrency said they invested because they believe it will replace standard currencies. Nearly 30% said they bought cryptocurrency to make secure payments, and almost the same percentage said they bought because they like that it isn’t government-controlled.

It’s interesting that less than 35% of our respondents own cryptocurrency for the reasons it was ostensibly invented — for things like secure payments and the absence of banks. If people are buying cryptocurrency just to make money, will the dream of decentralized and unregulated payments last?

Crypto investors also like stocks and mutual funds

We were pleased to see that over 50% of those who own or have owned cryptocurrency are invested in a retirement account and that 65% have diversified their portfolio with stocks.

Which other types of investments do you own?

Percentage of owners/previous owners of cryptocurrency

Stocks

65.09%

Retirement account

50.91%

Mutual funds

43.82%

Bonds

35.74%

ETFs

26.62%

Commodities

20.40%

NFTs

20.23%

Other

1.08%

None of the above

7.55%

Data source: The Ascent survey of 2,000 American adults, conducted May 6, 2021.

However, 44% of crypto investors are also invested in mutual funds, which can incur high fees and sometimes don’t conform to The Motley Fool’s buy-and-hold investing strategy. Actively managed mutual funds try to beat the market, but studies have shown that they generally don’t stay above market averages for long.

Nearly two-thirds of Americans typically sell cryptocurrency within a year of buying

65% of Americans typically sell cryptocurrency within a year of purchasing it. They’re most likely to sell within six months.

Just 14% of respondents said they typically sell more than a year after purchase (though over a fifth said they haven’t sold any cryptocurrency yet).

The Motley Fool recommends that investors hold equities for at least three to five years — and while cryptocurrency is very different from stocks, we think it’s probably safe to apply that guideline here, too.

How long do you typically wait to sell cryptocurrency after you buy it?

Percentage of owners/previous owners of cryptocurrency

A day

7.30%

A week

13.93%

A month

16.75%

Six months

16.33%

A year

10.70%

More than a year

13.68%

I haven’t sold any cryptocurrency yet

21.31%

Data source: The Ascent survey of 2,000 American adults, conducted May 6, 2021.

20% of Americans get information on cryptocurrency from social media

Americans were most likely to rely on cryptocurrency news websites to get most of their information on which cryptocurrencies to buy or sell.

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About a fifth rely on friends and communities on social media, which has become a major source of information for Gen Z and millennial investors. Only 11% said influencers and experts on social media provided most of their information about which cryptocurrencies to buy or sell.

Where do/did you get MOST of your information about which cryptocurrencies to buy or sell?

Percentage of owners/previous owners of cryptocurrency

Cryptocurrency news websites

37.23%

Friends and communities on social media

20.40%

Traditional news websites

15.51%

Friends and family

13.02%

Influencers and experts on social media

10.61%

Other

3.23%

Data source: The Ascent survey of 2,000 American adults, conducted May 6, 2021.

Two-thirds of American crypto owners have used Coinbase

Coinbase was by far the most used exchange used to buy or sell cryptocurrency, with 66.58% of respondents having used it. No other exchange was used by more than 28% of respondents.

44% of people who have owned cryptocurrency believe the government should regulate it

Government regulation of cryptocurrency is controversial.

On one hand, decentralization is a big part of the crypto landscape — governments can’t track transactions, print more money, or otherwise keep a hand in the financial system.

On the other, there’s a huge amount of money in the crypto world, and some people think that consumers would be better protected with government intervention. We’re seeing it in some places around the world — China, for example, has essentially prohibited cryptocurrencies.

Given the uncertainty surrounding the regulation of cryptocurrency, we asked if the government should regulate cryptocurrency.

Americans lean towards believing the government should regulate cryptocurrencies, regardless of whether they own or have owned cryptocurrency or have never owned cryptocurrency.

Should the government regulate cryptocurrency?

Percentage of owners/previous owners of cryptocurrency

Percentage of non-owners of cryptocurrency

Percentage of all respondents

Yes

44.36%

17.91%

34.09%

No

34.66%

13.33%

26.38%

I don’t know enough about cryptocurrency to answer

20.98%

68.76%

39.52%

Data source: The Ascent survey of 2,000 American adults, conducted May 6, 2021.

Overall, 34% of respondents said they believed the government should regulate cryptocurrency compared to 26% who said the government shouldn’t. A sizable portion — almost 40% — said they don’t know enough about cryptocurrency to answer.

The percentage of respondents who said they don’t know enough about cryptocurrency to answer grew to 69% among those who have never owned cryptocurrency.

Owners or previous owners of cryptocurrency were most likely to back government regulation of cryptocurrency, but 21% still said they don’t know enough to answer.

Interest in cryptocurrency is growing, but barriers to entry remain

Interest in cryptocurrency investing continues to grow among American adults, and most think they can still make a profit by investing in cryptocurrency.

Over a fifth of American adults that have never bought cryptocurrency are likely to invest in the next year, and of those that own or have owned cryptocurrency, roughly 50% invested in cryptocurrency for the first time in the past 12 months.

Those who own or have owned cryptocurrency tend to have a relatively short time horizon — the majority sell typically within a year of buying.

Lack of understanding cryptocurrency and not knowing how to buy it are the most likely reasons potential first-time buyers of cryptocurrency have not invested. Over a fifth of Americans say they don’t understand how cryptocurrency works at all, and a similar number say they don’t understand how underlying concepts like blockchain and decentralized finance work. Among those who own or have owned cryptocurrency, almost 10% say they don’t understand how cryptocurrency works.

There are some apparent routes to make cryptocurrency more attractive. American adults would be more willing to buy cryptocurrency if they could store it in their primary bank accounts. They are also intrigued by credit cards that provide rewards and cashback in the form of cryptocurrency. Skepticism was higher towards receiving all or part of a salary in cryptocurrency, particularly among American adults who have never owned cryptocurrency.

When it comes to buying and selling cryptocurrency, American adults are turning to cryptocurrency news websites and friends and communities on social media more than other sources of information when deciding what currency to buy or sell. The majority of Americans that own or have owned cryptocurrency use Coinbase.

Americans are also largely undecided about whether the government should regulate cryptocurrency.

Overall, interest and investment in cryptocurrency remain on a positive trajectory, with further education about cryptocurrency and integration with banks and credit cards appearing as steps that could draw new investors.

Methodology

The Motley Fool distributed this survey to 2,000 American adults via Pollfish on May 6, 2021.

Respondents were 44.7% female and 55.3% male. Age breakdown was approximately 8% 18–24, 24% 25–34, 38% 35–44, 14% 45–54, and 14% over 54.

Some percentages may not total to 100% due to rounding.

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View more information: https://www.fool.com/the-ascent/research/study-americans-cryptocurrency/

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