New Investment App Users Are Flocking to Crypto, Survey Finds
Investment apps are giving people more ways than ever before to buy and sell cryptocurrency.
Traders in the past were limited to crypto exchanges, like Gemini and BiNance, which feature complex registration and transaction processes that can be intimidating to newcomers.
Apps such as Robinhood, SoFi, Webull, Public and others have simplified the process for retail consumers. These apps act as crypto brokers, placing digital coin orders directly with exchanges on the user’s behalf.
Now, investors can dabble in crypto in the same app they use to buy more traditional assets like stocks and ETFs.
Investment App Users Eye Crypto’s Big Paydays
Volatility is a trademark of cryptocurrency. Yet a majority of investment app users accept those roller-coaster price fluctuations in exchange for high potential payoffs.
The Penny Hoarder polled nearly 2,000 investment app users in December 2021, and over half of respondents (51%) view cryptocurrency as a high risk, high reward investment. On the flip side, nearly 30% of survey respondents considered cryptocurrency a low-risk investment.
Those perceptions — coupled with investors’ real money — have been on a wild ride.
Bitcoin — the long-time crypto heavyweight — increased 63% in 2021 alone, driving the entire crypto market to a combined $2 trillion in value.
Ethereum also experienced eye-popping growth in 2021, rising in value by more than 400%.
While Etherum nearly doubled in price from February 2021 to February 2022, the currency experienced massive booms and busts along the way:
- February 2, 2021: $1,513
- May 14, 2021: $4,080
- July 20, 2021: $1,786
- Nov. 8, 2021: $4,811
- Feb.1, 2022: $2,789
In early 2022, the global crypto market plummeted, erasing more than $1 trillion in wealth. The volatility of cryptocurrency continues to raise concerns about the inherent risk of investing in this speculative and unregulated market.
Bitcoin, Ethereum and Dogecoin Are the Most Popular Coins Among Investment App Users
Bitcoin reigned No. 1 with investment app users — 52% of respondents say they’ve bought the digital coin.
Etherum ran a distant second with 35% of respondents buying in.
Dogecoin — a headline-grabbing memecoin hyped by billionaire Elon Musk in 2021 — was the third most popular cryptocurrency among survey respondents, at 34%.
Celebrities Hold Sway With Crypto Buyers
Celebrities and influencers are also throwing their weight behind cryptocurrency, promoting digital assets to their legions of followers.
More than four in 10 respondents (45%) said a celebrity influenced their decision to buy cryptocurrency, according to survey data.
High-profile figures to publicly back crypto coins and exchanges include Matt Damon, Paris Hilton, Jamie Foxx, Tom Brady, Ashton Kutcher and Gwyneth Paltrow.
Interestingly, respondents aged 35-44 were the group most likely to say a celeb persuaded them to buy crypto, at 53%.
In contrast, respondents aged 54 and older were the least likely to buy crypto based on a celebrity endorsement, at 32%.
Celebrities aren’t financial experts, and their growing influence over young investors is raising concern — and prompting legal action.
Lawyers filed a class-action lawsuit against Kim Kardashian, former NBA star Paul Pierce and boxer Floyd Mayweather in January 2022, accusing the celebrities of hyping a little-known coin called EthereumMax.
The suit claims EthereumMax operated a “pump and dump” scheme, where misleading marketing is used to inflate the price of an asset, “causing investors to purchase these losing investments at inflated prices,” according to court documents.
The lawsuit is the latest example of crypto’s mainstream popularity — and speculative nature.
Rachel Christian is a Certified Educator in Personal Finance and a senior writer for The Penny Hoarder.
About the Survey
The Penny Hoarder conducted the random national survey in partnership with Pollfish from December 15-18, 2021. Pollfish screened respondents by asking if they had used at least one investment app regularly within the past year: 3,581 people responded to the screening question, with 2,000 people who used at least one investment app regularly advancing to the survey’s 20 questions. The Penny Hoarder analyzed the data and removed 82 responses that were not valid, bringing the response count to 1,918. Responses were weighted for age and gender so that each response is representative of the U.S. population. The overall survey’s margin of error is +-2 percentage points at a 95% confidence interval.