The Huge Dormant Wave of New Bitcoin Buyers Doesn't Even Get Bitcoin Yet

In recently published research, aptly called “Do You Even Crypto, Bro? Cryptocurrencies in Household Finance” and based on repeated large-scale surveys of U.S. households, the Federal Reserve Bank of Cleveland found that bitcoin and other crypto assets are poorly understood compared with other financial assets and that the knowledge gap itself appears to be an adoption opportunity.

The Reasons for (Not) Owning $BTC

For example, insufficient information about the asset class is still cited by respondents as the main reason why people do not own crypto assets, while the second most popular reason is that they consider it a bad investment.

However, the reasons for owning “crypto” don’t demonstrate a great understanding of this asset class and technology either. Here, the two main reasons for owning $BTC or other crypto assets are to invest profitably and diversify an investment portfolio, and not because of the possibilities the technology itself brings, including independence from banks.

This is also corroborated by other findings of the research. The authors of the paper randomly showed people information about $BTC’s previous 12-month return, which increased their desired bitcoin allocation by ~47%, while also increasing their expected returns by a few percentage points. Meaning, their willingness to invest in bitcoin was fueled not necessarily by an understanding of what they’re investing in, but more by the past performance of $BTC.