Cryptocurrency is a newer asset class, and there are a huge number of different virtual coins that you could invest in. These include well-known currencies such as Bitcoin and altcoins that come onto the market regularly.
Although many cryptocurrencies use promising new technology, they are a volatile investment subject to wild swings in prices. They can also be confusing to purchase despite the growing number of mainstream brokerage firms that are now making crypto investments possible.
But while they are a risky investment, they are a popular one. In fact, recent research from Survey Monkey shows that a surprising number of people are invested in cryptocurrency.
Here's how many people are invested in crypto
According to Survey Monkey, 11% of people within the United States have put some of their money into cryptocurrency.
While this is a big percentage of investors, not every demographic group is equally excited about buying virtual coins. For example, crypto investing is more popular with men than it is with women. A total of 16% of men have crypto investments in their portfolios compared with just 7% of female investors.
Young and middle-aged investors are also more likely to have embraced this new asset class. Among investors between the ages of 18 and 34, 15% of people have invested money in cryptocurrency. This drops to 11% of investors between the ages of 35 and 64. And just 4% of investors aged 65 and over have purchased crypto investments.
This isn't surprising, as younger investors are more likely to be exposed to crypto through social media and are often more technologically advanced than older investors. This helps them to better navigate the process of buying virtual coins.
Among those who invest, the reasons for putting cash into crypto are similar to the reasons for buying any other assets. Most people (60%) believe virtual coins could provide the opportunity for long-term growth. Close to half of crypto investors (44%) also believe that there is a strong potential for high growth within a short period of time.
Despite the fact that so many Americans are investing in cryptocurrency, not everyone is convinced that virtual currencies are a viable investment. In fact, 44% aren't sure what they expect Bitcoin's price to be by the end of the year, while just 21% of people indicate they think the price will be higher than at the time of the survey. And 45% of investors believe crypto is a high-risk investment.
Should you join your fellow Americans in making a crypto investment?
Cryptocurrencies undeniably present exciting new opportunities, and many financial experts like Dave Ramsey believe putting some money into virtual coins could be worthwhile.
However, experts like Suze Orman warn that it's best to invest money in virtual currencies only if you can afford to lose it. And it's especially important to invest only if you've met other financial goals such as saving for retirement and fully funding your emergency fund.
You should also make sure to do your own research independently, as there are some types of cryptocurrency that are riskier than others. Don't follow what's popular on social media, but instead make sure you understand the business model of the coins you're buying and assess how the investment fits into a diversified portfolio.
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