Are cryptocurrencies a serious alternative to the current financial system?

Cryptocurrency prices have plummeted since peaking last fall. However, this does not appear to be affecting demand. Perhaps even the lower prices appeal to young adults in particular?

  • Bitcoin and Co. as alternative means of payment
  • Respondents view the crypto market more positively than a year ago
  • Crypto investments appeal primarily to younger people

In a study by the crypto platform Cake DeFi together with the market research institute Dynata, 1,000 people in Germany were surveyed. The aim was to find out what significance cryptocurrencies will have in relation to payment options, retirement provision, or the generation of passive income in the future.

Who Invests in Cryptocurrencies?

There is great agreement among those surveyed (85 percent) that the crypto industry is generally promising. They see Bitcoin, Ethereum, and Co. primarily as a future payment method and alternative financial investment. The crypto investors among the respondents also invest their money in stocks, mutual funds, and ETFs at the same time.

In the youngest age cohort, 18-24-year-olds, cryptocurrencies come in third place after shares and savings accounts: According to the survey, 75 percent are already invested in cryptocurrencies. This is surprising, because older representative surveys have already made it clear that crypto investments appeal primarily to younger people, but the number of those who were actually invested was in the lower double-digit range.

What role can cryptocurrencies play in the future?

According to the survey, 53 percent of respondents currently use cryptocurrencies for active trading, 42 percent to generate passive income. 35 percent hold cryptocurrencies permanently and 29 percent use cyber currencies for retirement provision. Respondents are also open to new financial products from the crypto sector; this is much more common among younger people (over 70 percent) than among those over 40 (15 percent).

91 percent of respondents see their crypto investments as an alternative investment opportunity to the traditional financial system, and 22 percent believe that crypto could completely replace the traditional financial system. Among those who are not yet invested in the crypto sector, a high proportion of those surveyed (nearly 50 percent) also believe that crypto can represent an alternative to the existing financial system, although only six percent believe that crypto will replace it could.

Crypto assets: More popular with young investors

According to the FAZ, a WisdomTree survey from July 2022 paints a similarly positive picture of cryptocurrencies. Only people between the ages of 18 and 30 were interviewed. It is interesting here that the respondents stated that they currently rate cyber currencies significantly more positively than they did in November 2021. 27 percent of those surveyed are already invested in cryptocurrencies, two percent more than in traditional financial products.

With regard to the level of information and knowledge about crypto assets, the survey does not come to clear results. Basically, the respondents felt much better informed, but they tended to want better access to well-founded information material (e.g. provided by financial institutions) and pay less attention to the recommendations of individual personalities. Since crypto assets are increasingly being viewed as a mature asset class, stricter regulation of crypto assets is also desired.

The FAZ also refers to a survey by CoinShares, which regularly surveys fund managers invested in crypto. It is striking here that, for the first time in a long time, cryptocurrencies are currently being perceived as cheap and significantly less often than speculative. The fund managers are also reporting increased demand from customers.

In all studies, it is clear that crypto has an “age problem”. Older respondents were much more skeptical in all questions, while younger ones have had much more experience with investments in the crypto sector.


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