Crypto fans are revolutionizing online investing

By Will Johnson, CEO of the Harris Poll 

For the longest time, there were only a few investment choices for people who wanted to go above and beyond a 401(k) or a savings account. Those with extra income typically opted for stocks, bonds, annuities, and real estate. Today, many adults in the United States — especially millennials and Gen Zers — find those granddad options about as relevant as a phone book.

Instead, according to a new national survey by The Harris Poll, almost nothing seems too risky for more and more of us when it comes to online investing. The trendlines are strong enough to suggest that if this is a fad, it’s unlikely to end soon.

Altogether, 16 percent of American adults today have money in cryptocurrencies like Bitcoin and Ethereum (the same percentage of adults buying bonds); 14 percent own meme or viral stocks such as GameStop (more than those who invest in annuities or exchange-traded funds); and 11 percent have purchased one-of-a-kind digital assets known as non-fungible tokens (only a percentage point less than those investing in commodities).

If that’s not enough, one in seven adults 40 and younger say they’ve bet on the outcome of gameshows or the weather. Roughly a quarter of millennials and Gen Xers wager on sports. And most millennials say they’re interested in an app that would let them “invest” in the outcome of yes/no events, like whether Turkey will join the EU.

The corporate sector is starting to embrace these markets, too. Tesla recently disclosed it has bought $1.5 billion in Bitcoin while Mastercard says it will allow merchants to begin to accept select cryptocurrencies for payment later this year. Investment firm Van Eck just launched an exchange-traded fund tracking stocks getting buzz on Reddit and other social media. And everyone from Christie’s to the NBA is making money from the auctions of digital arts and video.

We may be at the beginning of a whole new mindset about how and what we buy. “Gaming technologies are laying the foundation for a new interactive layer for online platforms that (will) eventually evolve into the metaverse,” Richard Yao, manager of strategy and content at IPG Lab, wrote in a recent essay. “And digital goods are a key ingredient of the metaverse.”

Roughly half of adults investing in cryptocurrencies, meme stocks, and tokens that certify ownership of digital collectibles like celebrity-issued art or video clips say they began their purchases in just the last six months, following the lead of Gen Z, who discovered these markets seven to 12 months ago. Catching up with the kids, 40 percent of baby boomer investors in cryptocurrencies and meme stocks say they joined the rush in the past three months.

Who else is into speculative investments? College grads and those with higher incomes, though, because they have more wealth, they’re also more likely to invest in conventional options such as stocks and bonds. Also people who are employed and parents of kids at home.

Also Black people and Hispanics. For instance, 25 percent of Black Americans and 15 percent of Hispanics say they’ve bought non-fungible tokens versus 8 percent of white Americans. Minority adults are also much more likely to think that meme stocks and other unconventional assets will remain valuable in the long term. And they’re much more likely to want to wager on yes/no events if an app allowed it.

Almost certainly, more of people will risk their money on nontraditional investments for the chance to get rich (or richer). Given the untested nature of today’s new bets, however, it wouldn’t be surprising to see more people eventually ending up in the loss column. Maybe blockchain-based tokens making you an owner of an NBA Top Shot video or a JPG file by digital artist Beeple will continue to rise in value for years to come. Indeed, in the view of those in Gen Z, cryptocurrencies, meme stocks and non-fungible tokens are surer wagers over the upcoming decades than any other investment.

“I actually believe it is a bubble, to be quite honest,” Mike Winklemann, which is Beeple’s real name, said in a Planet Money interview. But he added: “When the bubble bursts, it’s not going to wipe out the technology. It’s just going to wipe out the junk.”

Read the full article at The Boston Globe.

Download the full data here.

Methodology

This survey was conducted online within the United States by The Harris Poll between March 5-8, 2021, among 1,068 U.S. adults ages 18 and older. This online survey is not based on a probability sample and therefore no estimate of theoretical sampling error can be calculated. Figures for age, sex, race/ethnicity, education, region and household income were weighted where necessary to bring them into line with their actual proportions in the population. Propensity score weighting was used to adjust for respondents’ propensity to be online. For more information on methodology, please contact Dami Rosanwo.