Who Is Most Likely To Hold Cryptocurrency?

Cryptocurrency offers pseudonymity, which means it can be difficult to determine exactly who is using cryptocurrency wallets, nevermind what they are using it for. However, the crypto community is active and many members are vocal about their participation.

This, combined with global intrigue, especially from banks, government agencies, and large organizations, means there have been considerable studies and surveys conducted to find the groups who are most likely to invest in or use cryptocurrency.

Cryptocurrency Penetration

As well as being a useful alternative to traditional ecommerce payments, cryptocurrency is widely used for peer-to-peer transfers. However, it is still primarily used as an alternative investment. To send and receive payments, store crypto, or transfer money to others, users need a crypto wallet, whether it is a hot or cold wallet, physical or software.

According to technology editor Kane Pepi, the most important factor when choosing a wallet is how secure it is. But, ease of access, device compatibility, and currency compatibility are important factors to consider.

Cryptocurrency Rise

Cryptocurrency is on the rise, with increased usage for commerce, peer-to-peer transactions, and other payments. Generally, cryptocurrency attracts a younger audience, with millennials and Generation Z the most likely to invest in and use digital currencies.

However, there has been growth among Generation Xers, especially those looking for alternative investment opportunities. Looking at other factors, crypto users are far more likely to be male, and high-income earners make up a disproportionately large percentage of the crypto investment market, but crypto’s potential for serving the unbanked means that low-income earners are increasingly likely to use the technology for remittances and overseas transfers.

Age

Cryptocurrency is a digital currency. It requires some level of comfort using modern technology. Wallets and even exchanges have become more intuitive and easier to use. It is more difficult to make mistakes when sending transfers.

However, you still need to be comfortable using exchanges and sending payments to wallet addresses, which are long strings of nonsensical characters. This can put a lot of users off. It is also why cryptocurrency investments are more popular with younger generations.

Nearly a quarter of millennials own some cryptocurrency, while 19% of Gen Zers do. This figure naturally drops off through older generations. As well as being indicative of how comfortable different generations are using technology, it is also in keeping with risk aversion levels for these groups. Older generations, especially those who are already retired or are nearing retirement age, tend to have entered a consolidation stage of investment. They are risk averse, although there are exceptions to this rule.

Younger generations tend to be more tolerant of high levels of risk. Cryptocurrency as an investment does carry inherent risks. Prices are highly volatile. This volatility is what brings the potential for big returns, but it also carries massive risk. Investors can lose their whole investment. There are also security risks, although most of these can be mitigated through the use of reputable exchanges and reliable, secure crypto wallets.

Gender

According to studies, men are more likely than women to use technology, and especially to use innovative and breaking forms of technology. Various possible reasons have been given for this, but one is that women are more risk-averse than men.

This means they are less likely to risk using new technologies, and cryptocurrency certainly meets the criteria of being exactly this. This is further borne out by the fact that cryptocurrency investors and users are more likely to be male. In fact, around three-quarters of crypto investors and users are male.

As the market further matures, and technology like crypto wallets become easier to use, therefore carrying less risk, the gap between male and female users will likely decrease. However, the risk associated with cryptocurrency prices means that male users will continue to make up the majority of the market.  

Profession

Profession or job can point to a likelihood of using cryptocurrency. Self-employed and gig workers, for example, can really enjoy the benefits of cryptocurrency. Crypto payments are fast and tend to be cheaper than traditional payments.

This is true regardless of the distance payments are being sent – it costs the same to send payments to another continent as it does to send them down the road. Payments are instant, can be monitored and tracked using blockchain explorer software, and it is possible to bypass market volatility through the use of stablecoins.

Those within the technology and finance sectors are also more likely to hold crypto. Technology professionals tend to have a greater understanding of blockchain, and the technology used to access the blockchain.

They are more inclined to see the potential benefits of crypto. And those within the finance industry are likely to have first-hand experience of how crypto payments are faster than traditional, while also seeing the gains they can make.

Some other industries are starting to see increased uptake. For example, crypto is becoming more popular for ecommerce transactions, and as ecommerce companies become more likely to accept crypto payments, professionals within this industry are more likely to hold or use crypto themselves.

Wealth

In terms of wealth and income, high earners with an annual income of more than $100,000 per annum account for 25% of crypto owners despite only making up 10% of all people. High-income earners have more disposable income, so they can make higher-risk investments.

However, another possible reason for their involvement in the industry is that they are more likely to send high-value payments. These payments can attract considerable fees when using traditional payment methods like bank transfers, especially if the payments are sent overseas.

The costs for overseas payments are also lower for small transactions, but the comparatively higher savings made when sending big payments means that senders are more inclined to take a risk or look for alternative payment methods.

Changing Demographics

Cryptocurrency is still an emerging market. As the market has matured, it has already found a wider range of uses. What was initially used solely for transferring value between individuals has developed to include smart contracts, decentralized finance, and considerable investment opportunities.

Meme coins, NFTs, and layer 2 blockchains show how the market has matured. As the population also matures, cryptocurrency will continue to see its reach increase. The younger generations, who are already more comfortable using the technology, will age, and for the generations after them, cryptocurrency use will become second nature. This is also likely to see the divide between earning levels, gender, and crypto uses narrow.

Furthermore, wallets will become more accessible and governments and agencies will likely make moves to regulate the market, which will not only make it more accessible but offer greater consumer protection. Greater protection means lower risk, although volatility risks will persist, and this will attract some of the more risk-averse investors.

Conclusion

Cryptocurrency is primarily used as a means of investment, as evidenced by this year’s launch of ETH and BTC exchange-traded funds. However, it was created, with the 2009 launch of Bitcoin, as a means of transferring value between users.

The emerging technology continues to evolve and expand, but, currently, males are more likely to hold cryptocurrency, and so too are younger generations, although the gap will close in coming years and generations.