A study by the Pew Research Center determined that the majority of U.S. residents (88%) have at least a basic understanding of cryptocurrencies. However, only 24% believe investing, trading or using digital assets is safe and secure. The percentages vary by demographic group: adults over 50 (85%) are more likely to be skeptical than younger adults (66%).
Seventeen percent of study participants admitted to dealing with cryptocurrencies at some point in their lives. Attitudes vary by gender, age, race, ethnicity and income level. For example, 41% of men aged 18 to 29 said they had invested in or used the asset class, compared with 16% of women in the same range.
Digital assets seem to be more popular with minority groups. Twenty-four percent of Asian respondents and 21 percent of Black and Hispanic respondents said they were already part of the ecosystem. By comparison, only 14 percent of white adults did.
Knowledge levels appear to be high, with almost 90% of participants saying they have heard of at least a little bit of Bitcoin and some alternative coins. However, 75% expressed doubts about the safety and reliability of the asset class. Only 2% said they felt "very confident" when researching deeply, compared with 4% who said they were "very confident". Women are slightly more suspicious than men, with 80% of women in the "not confident" zone (compared to 71% of men).
It is worth mentioning that investors have a much higher level of trust in cryptocurrencies. One in five of those said they were "very" or "very confident," compared with 2 percent of those who had no allocations in the asset class. Pew Research also estimates that most investors (74%) entered the ecosystem one to five years ago. Only 10% of those who jumped on the bandwagon before 2018.
Unfortunately for 45% of U.S. investors, their forays into cryptocurrencies have not paid off as expected. Only 15% said they generated more profit than initially thought.
For 3% of investors, delving into the digital asset space resulted in significant financial losses. 16% said they were hurt "a little bit". The majority of those who left their jobs with significant amounts of money were college graduates (25%) and those with some college experience (20%). Some cryptocurrency experts have repeatedly warned that individuals should enter the market with the knowledge. Investing only where one can afford to lose is also outlined as a ground rule. Anthony Scaramucci, one of Bitcoin's most outspoken proponents, is advising investors in 2021 to allocate no more than 5% of their total savings to cryptocurrencies. That way, they can enjoy a healthy profit even as prices rise. On the other hand, if the valuation falls, the losses will be negligible.
