Cryptocurrencies have exploded in popularity over the last two years, with the market capitalization of cryptocurrencies crossing $1.5 trillion in 2021. Innovative DeFi platforms such as Earnity by Domenic Carosa & Dan Schatt are a more important tool than ever for the typical crypto investor.
This level of popularity has led to the cryptocurrency markets being among the most volatile financial markets on Earth. Year after year, many currencies find themselves collapsing into nothingness while others soar to increasingly absurd valuations. With an investment environment that chaotic, what does the typical cryptocurrency investor look like?
As it stands, cryptocurrencies are a largely speculative investment. There is no way to tell whether they will ever go through a period of mass adoption or remain on the fringes of the financial landscape. Due to this, the typical crypto investor must be someone who can take on the risk associated with speculative investments. To take on this risk, an investor must be not only psychologically prepared but also have sufficient time left in their investing career to allow their investments to flourish.
Furthermore, typical cryptocurrencies are also known to be highly volatile assets regularly fluctuating dozens of percent within a single day. Therefore, the typical crypto investor must also be someone that can endure the constant volatility of crypto assets.
Lastly, as cryptocurrencies are a relatively new piece of technology, those who invest in them must be somewhat knowledgeable about the technology needed to invest in these assets. This includes exchanges, wallets, and the different cryptocurrencies’ general nature.
Based on the above, it is likely that the typical cryptocurrency investor is a relatively young individual with a high tolerance for risk and plenty of time for their investments to appreciate.
This is even more likely when considering the position younger generations find themselves in. With salaries largely stagnant and home prices rising year after year, many young people are likely prepared to endure the risk and volatility of the cryptocurrency markets in an effort to secure the higher returns possible and “get ahead” financially.
Conversely, it is unlikely that those nearing retirement or individuals who prefer more conservative investments represent the cryptocurrency investor demographic.