A recent report suggests that, in spite of the fact that high net worth individuals (HNWIs)are growing more wealthy all the time, these investors are not yet taking part in the cryptocurrency market to the same degree as other demographics. The recent Capgemini World Wealth Report 2018 suggests that one of the reasons for this hesitation to adopt one of the trendiest new investment areas in the financial world may have to do with the wealth management industry.
29% Have 'High Interest'
The report, cited by Bitcoinist, suggests that 29% of millionaires have a “high degree of interest” in entering the cryptocurrency space as investorswhile another 27% “sit on the fence.” Altogether, then, a full 56% of HNWIs are either prepared to invest in digital currencies now or could likely be swayed to do so in the near future. Some 44% of HNWIs have expressed a lack of interest in the space.
Given the breakdown above, one might expect that a relatively large proportion of millionaires would be active as cryptocurrency investors. However, only about a third of the more than 2,600millionaires included in the study have received information about investing in cryptocurrencies from their wealth managers.
Caution: Necessary or Overblown?
Wealth managers may still be largely cautious about the long-term health of the digital currency space, or perhaps they lag behind individual investors when it comes to their understanding of cryptocurrencies and their potential. While the traditional financial world has remained broadly hesitant when it comes to digital currencies, there have been some signs that mainstream investors and some financial institutions are warming up to the concept, or at least to the blockchain technology that supports the cryptocurrency space.
Wealth management firms are typically focused on traditional and institutional investing practices, meaning that they are less likely to be at the vanguard of cryptocurrency investment opportunities. Nonetheless, Capgemini believes that a shift may be approaching: The report suggests that “the strong demand for information on cryptocurrencies from younger HNWIs is likely to force wealth management firms to at least develop and offer a point of view during the months ahead.”
The report also indicates that investment returns for HNWIs are above 20% as of last year, marking the second year in a row that this demographic has grown substantially wealthier.
Investing incryptocurrenciesand Initial Coin Offerings ("ICOs") is highly risky and speculative, and this article is not a recommendation byInvestopediaor the writer to invest in cryptocurrenciesor ICOs. Since each individual's situation is unique, a qualified professional should always be consulted before making any financial decisions.Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein. As of the date this article was written, the author owns bitcoin and ripple.
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FAQs
Do Millionaires Invest in Bitcoin? Several wealthy individuals make no effort to hide their bitcoin holdings, and it's likely that many more millionaires and billionaires invest in the cryptocurrency without advertising it.
Why people don t use crypto? ›
“People avoid using cryptocurrencies because they don't see others using the currencies, and they wait for other people,” Artamonov said. He adds: People are afraid of the price volatility, which is good for investors, but bad for non-traders who want a stable price)
Why doesn't everyone invest in crypto? ›
Because of bitcoin's volatility, and because so much of its value is derived from speculating rather than investing, we typically do not recommend bitcoin to our clients. Most of the people we serve are saving for their long-term goals.
Do billionaires use crypto? ›
How Many Billionaires Own Crypto? There are 16 cryptocurrency billionaires in Forbes' ranking of billionaires. Sam Bankman-Fried is still on the list as the seventeenth, but Forbes lists the ex-CEO of FTX with no wealth. 4 There are likely many more billionaires who own crypto, but most do not publicize their holdings.
How many people got rich off of crypto? ›
A survey estimates that there are 88,200 millionaires around the world who have become rich through crypto assets, highlighting how this sector affects the wealth landscape.
Can you still get rich off crypto? ›
The truth is that you can get rich by investing in crypto, but making money in crypto is the same as making money with any type of investment. To become rich, you have to do your research, work with a financial advisor, follow specific markets and make trades at the right time.
Why is crypto not the future? ›
Volatility and lack of regulation. The rapid rise of cryptocurrencies and DeFi enterprises means that billions of dollars in transactions are now taking place in a relatively unregulated sector, raising concerns about fraud, tax evasion, and cybersecurity, as well as broader financial stability.
Why crypto is not worth it? ›
There are several risks associated with investing in cryptocurrency: loss of capital, government regulations, fraud and hacks. Loss of capital. Mark Hastings, partner at Quillon Law, warns that investors must tread carefully in crypto's unique financial environment or risk significant losses.
Why shouldn't you buy crypto? ›
Holdings in online “wallets” are not insured by the government like U.S. bank deposits are. A cryptocurrency's value can change constantly and dramatically. An investment that may be worth thousands of dollars today could be worth only hundreds tomorrow.
Why doesn t Warren Buffett invest in crypto? ›
Perhaps the most famous value investor of all time, Warren Buffett is strongly against Bitcoin and other cryptocurrencies, saying, "You can't value Bitcoin because it's not a value-producing asset." Buffett and his holding company Berkshire Hathaway Inc. have been well-known for their investments in stable and ...
Their criticisms were familiar: Bitcoin has no fundamental value beyond what supply and demand dynamics give it; prices can be manipulated; it is highly energy-intensive; and it is used to fund crime and launder money.
Why are people hesitant to invest in crypto? ›
This is why many small investors and large institutions have hesitated. “Beyond the typical concerns of volatility and regulatory uncertainty, my reservations about crypto were tied to a lesser-known fear — the fear of the unknown,” says Artem Minaev, senior investment advisor and co-founder at CryptoDose.
Does Bill Gates support cryptocurrency? ›
Bill Gates Says He's 'Neutral' on Bitcoin.
What is the FBI warning on cryptocurrency? ›
The FBI warns Americans against using cryptocurrency money transmitting services that are not registered as Money Services Businesses ( MSB ) according to United States federal law ( 31 U.S.C.
Who is richest person in crypto? ›
For the third year running, Changpeng Zhao, founder and former CEO of crypto exchange Binance, is crypto's wealthiest person.
Are there millionaires from crypto? ›
Over the course of its 15-year history, Bitcoin (CRYPTO: BTC) has made plenty of millionaires. In fact, data from the blockchain analytics platform Glassnode shows roughly 115,000 wallet addresses with a balance of more than $1 million today.
How much crypto do you need to be a millionaire? ›
So, 10 times from those levels would mean that Bitcoin could go as high as $350,000, Saylor said. If this is the case, you would need to own 2.86 BTC to become a millionaire. It would cost around $190,000 today.
How much of your wealth should be in crypto? ›
Less Than 5% Several experts argue that due to their inherent volatility, investors should allocate no more than 5% to crypto.
What is the best crypto to invest in to become a millionaire? ›
Bitcoin:
With institutional adoption on the rise and growing mainstream acceptance, Bitcoin remains a staple in any crypto portfolio. As a store of value and hedge against inflation, Bitcoin's scarcity and deflationary nature make it a compelling long-term investment for millionaire hopefuls.
