Turns out crypto investors are really good at saving
31 October was World Savings Day, but the date also marked 12 years since Satoshi Nakamoto published the Bitcoin white paper. The two coinciding could be considered mere happenstance. After all, Bitcoin and savings are generally considered awkward neighbours. But new research may suggest otherwise.
The notion that cryptocurrency investors are from a different planet than those who spread their money across various assets in diversified portfolios is a persistent one.
An online survey of 6,642 crypto investors, conducted by market research firm YouGov, between 20 August and 2 September, revealed that 90% of respondents globally have in the past sought out financial advice, while 78% save on a regular basis. Half the respondents kept as much as 30% of their portfolio in cryptocurrency investments. The respondents were from Australia, Kenya, Nigeria, South Africa, and the UK.
Compared with the findings of reports focussed on the financial well-being of the general population, the YouGov respondents seem to be more astute savers than their fellow citizens.
The savings culture in a developing country such as South Africa, for example, is notoriously bad, which could easily be attributed to the high level of inequality in the country, but this issue spans various income demographics. More than 50% of the 1,200 individuals taking part in the “Letters to My Pre-Covid-19 Self” campaign said they were unable to make their money last to the end of the month, let alone put cash aside for the future. The study by South African insurer Sanlam found that financial stress topped the list of concerns during the pandemic, above health and other issues. Another report by 10X Investments has termed the savings situation in SA a “retirement time bomb”. Roughly half of those surveyed in the 10X “South African Retirement Reality” report said they didn’t put any money toward retirement savings.
The situation in the UK seems rosier, however. Statista shows the gross household savings rate hovering around 16% of general income. Interestingly, 36% of the YouGov respondents in the UK indicated that their cryptocurrency investments formed part of savings for a house deposit. In a survey by Prudential, “Family Wealth Unlocked”, 53% of respondents said the pandemic had prompted them to seek financial advice, which is another pat on the back for UK citizens, but it’s still some way behind the 90% of crypto investors who had sought out financial advice as indicated in the YouGov survey.
The echo chamber
Drawing hard conclusions from one or two studies won’t stand up to scientific scrutiny, but what these studies reveal is a world outside of social media where crypto investors make informed financial decisions based on research and professional advice, perhaps more so than their counterparts who haven’t yet adopted cryptocurrency. A world where exhortations like “GET IN EARLY MAKE MILLIONS” and “5 Coins That Will 20x In DEC” are met with skepticism.
The YouGov survey indicates that not all crypto investors howl at the moon every time their favourite coin dips or spikes. These are adults – moms, dads, partners, individuals – who are in the fortunate position to save and want to put some of that money to work in cryptocurrency to pay for their kids’ education, to save for a home or retirement.