Private investors who invest in cryptocurrencies are largely male, have higher portfolio wealth, log into online banking more often than investors who do not invest in cryptocurrency, trade more frequently, and hold more securities, especially more single stocks. In addition, crypto retail investors are more likely to participate in riskier ETFs, such as those investing in emerging markets or the biotech sector. This typification is revealed for the first time in a SAFE Working Paper published by the Leibniz Institute for Financial Research SAFE.
"Using a sample of approximately 100,000 investor profiles, we have basically created the profile of a typical crypto investor," says Andreas Hackethal, director of the research department Household Finance at SAFE and one of the authors of the research paper. "We can also use it to understand how the typical private DIY investor in Bitcoin and the like behaves in the market and what his or her investment portfolio looks like."
Crypto investors have higher wealth in terms of total assets under management
Accordingly, investing in cryptocurrencies is not only a male domain. Those who primarily invest their money themselves in Bitcoin, Ethereum and Ripple also have a monthly income that is almost twice as high compared to private investors who avoid cryptocurrencies. In addition, the total assets under management (AUM) of crypto investors is significantly higher. Finally, the research paper shows that after the initial purchase of the digital currency, investors' trading and login activity increases significantly.
"Obviously, crypto investors have an increased interest in their own financial situation and possibly consider their investment as a hobby, maybe even as a profession," Hackethal explains.
The sample the researchers used for the SAFE Working Paper is based on administrative data from a large German online bank. Bitcoin, Ethereum and Ripple were identified as the three cryptocurrencies with the highest market capitalization at the time of the survey. Cryptocurrencies were included in a total of 31 securities purchased by at least one sample investor between the years 2014 and 2017. 90 per cent of the cryptocurrency sample is male, compared to 75 per cent of the baseline sample.
Prof. Dr. Andreas Hackethal
Director of the SAFE research department Household Finance
Phone: +49 69 798 33700