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Demand for crypto investment products is rising, study says

By Robert Davis

20:24, 17 December 2021

Businessman draws growing line symbolising growing demand.
The market for bitcoin investment products continued to expand in 2021 - Photo: Shutterstock

A new study by Grayscale Investments, a global digital currency management firm, showed that investors are increasingly bullish on the adoption of bitcoin and other digital currencies.

Out of the 1,000 investors Grayscale surveyed, more than 26% reported holding cryptocurrencies in their portfolio and more than half said they were “interested” in the asset class. Another 55% of respondents said they invested in bitcoin within the last 12 months.

The 2021 Bitcoin Investor Study also said that for the first time more than half of respondents consider bitcoin to be a long-term store of value investment rather than a currency.

“While it is encouraging to see attitudes towards crypto continue to evolve, it is still early days for this industry,” Michael Sonnenshein, CEO of Grayscale Investments, told Capital.com in an email. “It is incumbent on all of us to remain focused on educating the investing public, so investors across generations and demographics can access this once in a generation opportunity”.

Demand for bitcoin

The study also measured considerable growth in the demand for bitcoin. Approximately two-thirds of the investors who reported having holdings have been “hodling”, or “holding on for dear life”, for more than a year. Another 77% reported being willing to invest in the asset class via an exchange-traded fund.

Meanwhile, the market for bitcoin investment products continued to expand in 2021 and now account for 59% of all the available crypto-related products.

“It is becoming increasingly difficult for investors to ignore bitcoin as its price continues to rise,” the study said.

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Investor demographics

As demand is rising, the study said investors are also finding new ways to access cryptocurrency assets.

XRP/USD

0.61 Price
+1.790% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.01168

ETH/USD

3,478.67 Price
-0.750% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 6.00

BTC/USD

67,374.65 Price
-0.640% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 106.00

DOGE/USD

0.14 Price
-2.840% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.0012872

Crypto investors are still primarily young, male and white but the study found increased interest among more senior age groups. For example, the nearly half of the 55 to 64-year-old age group reported they would “definitely” or “probably” consider bitcoin investments.

Another 53% of female respondents reported the same interest in crypto investments, up from 47% in 2020, the study said.

More than half of these investors are now finding their way through trading apps such as Coinbase or eToro compared with just 35% of respondents who still purchase their crypto from exchanges.

Future seems bright

While increased demand could be good for asset prices in the long run, the study found that the demand is not driven by greed or the desire for capital gains.

It also found that investors want to learn more about the asset and its underlying technology, which suggests that the market may soon reach a new level of maturity.

“With such a high demand for further education, providers, advisers and other investment gatekeepers should consider how they are meeting investor demands to better understand this new asset class,” the study said.

Read more:  Crypto fraudsters took .7bn last year

Markets in this article

BTC/USD
Bitcoin / USD
67374.65 USD
-434.5 -0.640%

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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