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 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.
Why investing in 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.
Are there really crypto millionaires? ›
Bitcoin has made many millionaires already, and you could be one, too. Over the course of its 15-year history, Bitcoin (CRYPTO: BTC) has made plenty of millionaires.
Can I lose more money than I invest in crypto? ›
If you decide to invest in crypto then you should be prepared to lose all your money. However, if you do choose to invest, make sure it's as part of a diversified portfolio with investments being no more than you can afford to lose.
Why people don t buy crypto? ›
Consequently, unlike shares and bonds, there's no reliable way to determine the REAL value of Bitcoin and most other cryptocurrencies, which makes it a risky investment.
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.
Why crypto is not the future of money? ›
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.
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.
How did people get rich off crypto? ›
Crypto billionaires are a motley bunch—some have made their billions by providing products and services to the emerging ecosystem, while others have generated profits by taking advantage of crypto volatility.
Crypto is a volatile asset in general, prone to significant price swings. Some crypto crashes are because of systemic issues within crypto, such as the collapse of FTX in 2022. Other times, macroeconomic factors such as interest rates and inflation can push values down.
Is crypto safer than banks? ›
Payments with traditional debit and credit cards offer certain security features that crypto doesn't. For example, in some cases you may not be liable for fraudulent purchases made in your name. This generally is not the case with cryptocurrency.
What are the fake Bitcoin companies? ›
Key Consumer links
| Primary Subject | Scam Type |
|---|
| good-bookingline.com | Fraudulent Trading Platform Advance Fee Scam |
| bitcoinfied.com | Fraudulent Trading Platform Advance Fee Scam |
| Bakktunt.com Bakktexe.com (Entity Impersonating Bakkt) | Pig Butchering Scam Fraudulent Trading Platform Advance Fee Scam Imposter Scam |
28 more rowsApr 30, 2024
Can You Make $100 a Day With Crypto? It is possible to make $100 per day, but there is no guarantee or specific technique you can use to ensure it happens. Cryptocurrency trading, lending, staking, and investing all come with significant risks because it is such a volatile and unpredictable asset.
What percent of people get rich from crypto? ›
Just 0.07% percent of addresses are worth more than $1 million whereas 74.5% of addresses are worth less than $1. So when Erik Finman, the 18-year old school drop-out told CNBC he became a millionaire by investing money from his grandma into bitcoin, there's no need to feel foolish.
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.
