Cryptocurrencies to constitute 5 percent of U.S. investment pool in 2019

A higher perception of risk of cryptocurrencies and lack of knowledge or information on cryptocurrencies is hindering investments in digital currencies among U.S. investors according to a number of studies and surveys.

One is a survey done by The Harris Poll on behalf of the American Institute of CPAs (AICPA) and which reveals that cryptocurrencies will constitute 5 percent of the investment mix among the 35% of Americans who currently invest or are planning to do so in 2019. The percentage is comparable to exchange-traded funds which will comprise 8 percent in their portfolio according to the study.

The 5 percent score for digital assets is much lower compared to other mix of investments such as real estate (19 percent), 401(k) (19 percent), and IRA or Roth IRA (17 percent) were the most frequently cited in the study. Others scored lower, including mutual funds (16 percent), individual stocks (16 percent), CDs (11 percent), government bonds (10 percent).

However, the 5 percent which many would argue is still higher for a nascent crypto industry and even higher compared to previous years' percentages, is likely to increase if the hinderances are removed.

The survey by Harris Poll found out that 50% of adults in the U.S. do not have any understanding of cryptocurrencies, with 48 percent being not familiar with Bitcoin, Ethereum, or Litecoin.

And among those who are familiar with digital currencies, opinion was split on the future of the digital assets. Among those familiar with cryptocurrencies, 24 percent say they expect the price to appreciate while 29 percent say prices are likely to fall. In regard to volatility, 12% expect the prices to remain stable while 35 percent expect them to fluctuate widely.

The survey by Harris followed another poll done by Gallup done on behalf of Wells Fargo and released last month, which revealed that only 2 percent of U.S. investors already own Bitcoin, and 0.5 percent of those polled indicated that they will be buying it in the near future, while 26% of U.S. investors said they were intrigued by the flagship cryptocurrency. Gallup poll was conducted between May 7 and May 14 among U.S. adults who have invested approximately $10,000 or more in mutual funds, bonds or stocks. 

Earlier on, a poll by by personal finance website involving 2,000 adults in U.S. done in February  found out that 8 percent of American's are already invested in cryptocurrencies. This study, in addition to the other two by Gallup and Harris indicate the hindrances of buying or investing in  crypto in the U.S. or rather why more people are not buying crypto.

Crypto's risky, there is low level of knowledge of, or just a lack of interest in it

According to the Gallup survey, risk perception was the biggest factor hindering investments in the space. 75% of respondents indicated that bitcoin was ‘very risky’ while 23 percent considered the flagship cryptocurrency to be somewhat risky.

The study revealed that the perception of risk was what is keeping away investors since only 2 percent said it was not too risky. Lydia Saad, a senior editor at Gallup wrote in an analysis that most Americans chose security over growth and would rather play safe with their investments. She however said that many young investors who currently say they are intrigued by crypto may change the scene when they get converted after crypto goes more mainstream.

In comparison, survey revealed that 35 percent said the risk of investing in digital currencies was too high.

These three studies also agree on the fact that low level of knowledge of cryptocurrencies was hindering investments in the digital assets. 29% of those interviewed by Gallup said they possessed some level of knowledge on cryptocurrencies while 67% had heard about digital assets but did not know much concerning them. 5% of the investors said they hadn't heard about cryptocurrencies. In comparison, survey revealed that 40 percent of Americans who hadn't purchased cryptocurrencies said their reason was disinterest or believing there is no need to do.

Among the 29 percent who have some level of knowledge in the Gallup survey, probably risk or some other factors such as priority was preventing them to invest in these assets. Besides, more men or 38 percent claimed to know something concerning Bitcoin compared to 20 percent of women. And this affected ownership among the gender because among those interviewed by Gallup, 3% of men own digital assets compared to only 1 percent of women.

Also in the Gallup survey, the level of knowledge of digital assets varied with age and was higher (48 percent) among those aged between 18 and 49 years who said they new something about flagship cryptocurrencies. This is compared to only 22% of those aged between 50 and 64 years who said they had some level of Bitcoin knowledge. Additionally, only 16% of those aged 50 and 64 years had some level of knowledge of Bitcoin.

Again, about 3 percent of those aged between 18 and 49 say they owned Bitcoin compared to 1 percent of those aged 50 and above.

Additionally, ownership of Bitcoin is higher among those earning at least $90,000 and 3 percent in this category have bought Bitcoin compared to less than 1 percent among the lower-income investors. This also indicated the income factor as affecting investment of cryptocurrencies in U.S.

Volatility is not always necessarily a bad thing

For many Americans, market volatility may actually signal an opportunity according to the results by AICPA Survey. The survey revealed that about half of U.S. adults (48 percent) believe market volatility presented an opportunity to make profits. 62 percent of Millennials (aged 20-37) and 55 percent of Gen Xers (aged 38-53) agree about the potential profitability of this short-term buying and selling high-risk behavior compared to only 37 percent of Boomers (aged 54-72) who agree on this.

Even as the Gallup study revealed that more young people could invest in digital currencies in future than old, the AICPA survey said that experience in the market seems to have a factor on investment: most millennials have only experienced a bull market as adults and may not be as aware of the dangerous downturns that are a natural part of the market cycle.

Chairman of the AICPA’s National CPA Financial Literacy Commission Greg Anton said that investing was not a get-rich-quick scheme and trying to time a volatile market in order to get huge gains was a serious financial risk. He said many of those who enter markets with hopes of doing a quick profit are unable to handle watching them lose huge amounts as investment value drops. Thus they may end up selling at a loss. He added that most people would rather seek incremental gains over a longer time horizon, which is a safer and more sustainable approach.

36 percent of Americans said they considered steady annual return for an investment as the top factor affecting or determining their investment decision while understanding investment fundamentals such as risk level and expected return was the most important or top factor for 35 percent others to make an investment decision. 29 percent said they considered the previous performance of an investment as a top investment decision determinant while liquidity was most important for some 27 percent. 26 percent cited volatility as a top investment decision consideration.

Investing verses speculating on crypto is a hard subject

AICPA said that the risk associated with an opportunity to invest is a crucial investment to help Americans differentiate between investing and speculating. Many already know that investment is considered lower-risk and longer-term focused while speculating is high-risk and short-term focused.

A person's risk tolerance -- which is the potential amount of money they can endure losing -- affects their building of portfolio of investment. This risk tolerance is affected by a number of factors including time of holding before liquidation, the individual's net worth, the person's income and the ease of buying and selling the investment.

The survey revealed that three in ten Americans involved in household investment decisions (28 percent) do not do research into investing strategies and potential opportunities to invest. Again, majority of who do this research or 63 percent do it quarterly or less. AICPA speculates that this lack of research could be the cause of high risk investments among nearly a third of Americans involved in the investment decision-making.

Anton said that research was important before doing investment to take control of the financial future. He said although it was not possible to know future with certainty, evaluating past performance can give some insight into future possibility. According to him, finding a properly diversified portfolio that matches an investor's risk tolerance would give the investor confidence to stay focused on long-term strategy and protect them from the temptation of selling during short-term price swings.

The study also revealed worst mistakes many people make when investing such as the lack of an investment plan, showing that six in ten (59 percent) do not plan on making an investment in the next year.

David Kariuki

David Kariuki likes to regard himself as a freelance tech journalist who has written and writes widely about a variety of tech issues that affect our society daily, including cryptocurrencies (see and; climate change (, OpenSim and virtual reality (see He is currently pursuing a MSc in Environmental Management at Open University. He does write here not to offer any investment advise but with the intention of informing audience, and articles in here are of his own opinion. Anyone willing to use any opinion here as advise to invest in crypto should obviously take own responsibility and accountability of their losses (or benefits) thereof. You can reach me at [email protected] or [email protected]

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