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Last week, I highlighted the third annual Grayscale Bitcoin Investor Study, which is an expansive look at investors' changing attitudes toward the largest cryptocurrency.
Admittedly, that article didn't touch all the bases mentioned in the study, so a follow-up is necessary. Getting right to the point, advisors should note that bitcoin adoption and enthusiasm at the client isn't relegated to younger clients nor is it confined to men. Focusing on the age phenomenon, the Grayscale study turns up some interesting data.
“The segment of investors, between the ages of 55 and 64, saw a 16% jump in 2021 year-over-year as a percentage of the audience who would either definitely or probably consider Bitcoin investment products,” notes Grayscale. “However, interest in Bitcoin investment products is still the most robust among younger, male, and 'risk tolerant' investors, a theme that rang true in 2020 as well as 2019.”
The demographic side of the bitcoin adoption equation is its opportunity set for advisors because data confirm more and more investors are treating bitcoin as a long-term holding. Clients in older age ranges doing so need guidance in right-sizing bitcoin exposure.
Focus on Women, Too
Smart advisors know that female clients usually have different demands, desires and risk-tolerance levels than their male counterparts.
Focusing on risk tolerance, women are usually more conservative investors than men. However, scores of academic research and studies confirm women are also better investors and savers. Important points to be sure, but those factors aren't keeping women from embracing bitcoin and advisors need to be hip to that fact.
“The percentage of female investors who would consider Bitcoin investment products climbed 6% in 2021 vs. 2020 levels, while the segment of male investors in this category stayed relatively flat,” notes Grayscale.
That buries the lede. Today, 53% of women polled by Grayscale would probably or definitely consider allocating to bitcoin, up from 47% last year. If parity with male investors is assumed, and it's not unreasonable to do so, there's significant room for growth in terms of the number of female clients that will inquire about bitcoin or get involved with digital assets on their own because 65% of men will definitely or probably buy bitcoin.
Something else to consider is the rising demand for bitcoin education. Given that women are usually more prudent investors than men, it's reasonable to assume much of this demand is driven by women.
“With such a high demand for further education, providers, advisors, and other investment gatekeepers should consider how they are meeting investor demands to better understand this new asset class,” according to Grayscale. “As the survey results demonstrate, increased awareness and understanding of Bitcoin is strongly correlated with a greater likelihood of making a decision to invest.”
Motivated for Crypto Success
Remembering that foundations of crypto include democratization, equality and inclusion, it's easy to see why more women in 2021 are investigating the asset class and why more advisors should up their digital asset education games.
The combination of younger demographics and women demanding more bitcoin education, exposure and guidance should be all the motivation advisors need to make this asset class more approachable to clients.