In a new survey covering mainstream interest in cryptocurrencies, LendEDU, in collaboration with The Daily Hodl, explores the untapped market of traditional investors. The results reveal that 52% of respondents would likely use their brokerage accounts to invest in cryptocurrency, if the option existed, and 59% of traditional investors believe their brokerage will offer cryptocurrencies in the near future.
The interest in cryptocurrency investing mirrors recent institutional interest and developments on Wall Street, including the launch of Fidelity Digital Assets; the upcoming crypto exchange Bakkt from Intercontinental Exchange, the parent company of the New York Stock Exchange; Yale’s entry into crypto endowment investments, along with Harvard, Stanford, MIT and other leading universities; and pending Bitcoin ETF approvals that are being deliberated by the U.S. Securities and Exchange Commission.
Participants shared a strong willingness to invest in crypto, despite Bitcoin’s origins on the dark web, blockchain’s steep learning curve, cumbersome passwords and private keys, and the lack of consensus among US authorities about how the myriad types of cryptocurrencies should be defined, taxed and regulated.
The 1,000 adult American respondents who participated in the survey are not currently invested in cryptocurrencies. Instead, these investors hold traditional assets, such as stocks and bonds. They are customers of brokerages that do not offer direct cryptocurrency investments.
The respondents hold accounts at the following brokerages:
- Fidelity – 17%
- Etrade – 16%
- TD Ameritrade/Scottrade – 11%
- Charles Schwab – 10%
- Merrill Lynch – 7%
- Vanguard – 7%
- Edward Jones – 7%
- Ameriprise Financial – 5%
- Interactive Brokers – 4%
- TradeStation – 4%
- Other – 12%
The account holders indicated that they would trust a traditional brokerage more than Coinbase to handle their crypto – 41% compared to 14%. They would also trust Amazon more than Coinbase – 39% compared to 15%.
Respondents revealed their positions on portfolio diversification, investment options and investment methods, among other topics.
- Do you believe that investing in virtual currency would make for a more diversified investment portfolio?
a. 56 percent of respondents answered “Yes”
b. 21 percent of respondents answered “No”
c. 23 percent of respondents answered “Not sure”
Expectations about alternative investment options
- Are you disappointed that your brokerage account does not offer a virtual currency investment option?
a. 32 percent of respondents answered “Yes”
b. 42 percent of respondents answered “No”
c. 26 percent of respondents answered “Not sure”
Preferred platforms for new crypto investments
- Which existing method/platform would you choose to make an investment in virtual currency?
a. 38 percent of respondents answered “Mobile app (i.e Robinhood Crypto, Coinbase)”
b. 22 percent of respondents answered “Desktop platform (i.e. Robinhood Crypto, Coinbase)”
c. 24 percent of respondents answered “In person with a qualified financial advisor (i.e. Fidelity)”
d. 16 percent of respondents answered “Not sure”
While Coinbase focuses solely on cryptocurrencies without offering their user base traditional investments such as stocks and bonds, fintech startup Robinhood has been moving at top speed to offer both traditional investments and cryptocurrencies to their customers.
Robinhood Crypto, which was introduced in five states in February to roughly four million users, is now available in 25 states to its six million customers, up from five million in August.
Meanwhile, investment giants like Fidelity stood alongside Coinbase at a recent congressional hearing to discuss the emergence of digital assets, as legacy institutions are similarly engaged in exploring more ways to expose their customers to crypto investments.
Despite Robinhood’s lead, the survey reveals that traditional brokerages have a real first-mover advantage by being able to capture a combined 48% of the respondents.
- Would you consider moving your portfolio to a brokerage that allows you to invest in cryptocurrency as well as traditional investments?
a. 21 percent of respondents answered “Yes, definitely”
b. 27 percent of respondents answered “Most likely”
c. 30 percent of respondents answered “Not sure”
d. 18 percent of respondents answered “Most likely not”
e. 4 percent of respondents answered “Definitely not”
The online survey was conducted over a five-day period from September 21 to September 25, 2018.
You can check out the full survey here.