Growing Interest in Bitcoin
I usually write these posts on Mondays and on this particular Monday I’ll admit to being a little distracted. There are any number of issues going on right now, of course. You know them so I don’t have to bore you with a list. They’re natural and manmade, but for me today it’s the fires nearing South Lake Tahoe.
My family and I have spent tons of time in the area over many years, backpacking in Desolation Wilderness and enjoying frequent getaways to a family member’s home in Meyers. During the last several years while Sonoma County dealt with fires and smoke of it’s own, “Southshore” was our bugout spot, even though it was still smoky sometimes. It was our home-away-from-home. And I’ve run all over those hills while training for races. Too many great memories to count, so it’s hard to see the area at such risk.
Harder still are the property losses borne by multiple friends so far. For everyone’s sake I hope the brave folks of Cal Fire can pull a few miracles out of their hats in the coming days.
But that’s not what we’re here to talk about, right? This week I want to share some interesting information from my research partners at Bespoke Investment Group. They are truly awesome when it comes to research and putting things into perspective.
A good example of this is an update to their investor sentiment survey about bitcoin. I’m including sections of it below and a link to their site follows as well. The bottom line, I think, is that more investors are getting comfortable with the idea of digital assets. Their interest is still mostly tied to price action, of course, but overall this is another indicator that the asset class continues to mature.
Continue reading…
Bitcoin and other cryptocurrencies continued to bounce over the weekend into today [as of last week]. After a 50+% drawdown from high to low in the spring, Bitcoin has now rallied over 70% from its intraday low below $29,000 on June 22nd.
While cryptocurrencies like Bitcoin seem to gain more and more interest from the investment world with each passing day, you don't see a lot of sentiment surveys for bitcoin like you do for the US equity space. We have one of the few.
In our monthly Consumer Pulse survey of 1,500 US consumers balanced to census, we ask participants three questions related to Bitcoin. The first is whether or not they have heard of Bitcoin. If they have heard of Bitcoin, we then ask whether they have an interest in purchasing Bitcoin. We also ask whether they think Bitcoin is a good or bad investment.
(While we first began asking consumers our Bitcoin questions in late 2017, we have a gap in our survey data from May 2018 through May 2019, which is the reason for the gaps in data that you'll see in the charts below.)
The first charts below show the percentage of our survey participants that have heard of Bitcoin. This reading has actually been pretty steady over the past few years. Back in December 2017, 74% of survey participants had heard of Bitcoin, while the number stands at 81.8% as of today. We'd note that even after Bitcoin prices fell sharply during the spring, the percentage that have heard of it continued to tick higher to new highs just above high readings seen back in late 2017 and early 2018.
Below we show the percentage of consumers that have heard of Bitcoin that say they also have an interest in purchasing Bitcoin. Back in 2017 and early 2018, less than 10% said they had an interest in purchasing Bitcoin, but that number has trended higher since late 2019 up to its current level of 19.7%. Here we would note again that even after Bitcoin's big drawdown recently, the percentage interested in buying it has continued to tick higher. And at 19.7%, even though consumers have gotten more and more interested in buying Bitcoin recently, there is still plenty of room for more growth in this reading.
In the question regarding consumers' interest in purchasing Bitcoin, the potential answers are 1) Yes, 2) No, or 3) Maybe. When we combine the percentage that said "yes" or "maybe," the reading totals 52% versus 48% who said no. As shown below, July 2021 was the first month where more survey participants (who have heard of Bitcoin) said "yes" or "maybe" than "no" regarding interest in buying Bitcoin. This tells us that we've crossed another threshold in terms of validating Bitcoin as an investable product.
Finally, below we show the percentage of survey participants that have heard of Bitcoin that think it's currently a good or bad investment. Back in late 2017 and early 2018, more than 40% said it was a "bad" investment while only 10-15% said it was a "good" investment at the time.
Since the end of 2019, we've seen responses for "good" increase and responses for "bad" decrease to the point where they crossed for the first time in December 2020. Currently, 29.5% say that Bitcoin is a "good" investment versus 23.3% that say it's a "bad" investment. (The rest said they do not know.)
Again, these survey results suggest that a large majority of consumers have at least heard of Bitcoin by now. Only a fifth of those that have heard of Bitcoin have an interest in buying it, which is up from levels seen a few years ago but still at a level where there's plenty of room for growth.
Here's a link to Bespoke’s site if you’d like to read more.
Have questions? Ask me. I can help.
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