Why Crypto is an Attractive Investment: Unveiling the Motivations of Individuals
The cryptocurrency market has experienced a remarkable surge in popularity over the past decade. The market capitalization of the industry today, compared to ten years ago, reflects this exponential growth.
Understanding the driving forces behind people’s decision to invest in cryptocurrencies is an intriguing subject. Fortunately, a recent study conducted by the Federal Reserve, titled “Federal Reserve’s 2022 Diary of Consumer Payment Choice,” sheds light on this matter. Let’s explore the top three reasons why individuals choose to hold crypto:
- Most individuals believe crypto is a good investment
- People are attracted to new technology
- Lack of trust in authorities turned people to crypto
Most individuals own crypto as an investment
An overwhelming majority of individual investors (67%) hold cryptocurrencies purely as an investment. This statistic highlights the speculative nature of the industry, as most investors hope to achieve higher prices than what they initially paid. Additionally, only 0.3% of respondents reported using crypto for purchasing goods and services in the United States.
Many own crypto because they are interested in new technologies
About 20.7% of investors are driven to own crypto due to their interest in exploring new technologies. The appeal of being exposed to innovative advancements serves as a significant motivation for these individuals to buy and hold cryptocurrencies.
Lack of trust in the US government or the US dollar
Although only 1.6% of investors mentioned it, the lack of trust in the US government or the US dollar is a reason some turn to cryptocurrencies. This belief reflects the perception that government policies have not adequately supported the local currency, leading investors to seek alternative options like crypto.
The remaining respondents fell into various other categories, accounting for a total of 8.6%.
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