personal finance

Some investors are putting more money into cryptocurrencies than stocks


Bitcoin on display.

Chesnot | Getty Images

Investors who are bullish on cryptocurrencies are betting more on the digital assets than stocks.

In September, crypto investors put an average of $263 into accounts dedicated to coins, more than the average $250 they put in traditional brokerages during the month, according to a recent survey from Cardify.

“Month over month, the amount that users are putting into either crypto or traditional investments have shifted,” said Amber Foucault, head of product at Cardify. So far this year, nearly 25% of the money that investors are putting away is going to cryptocurrencies, a big jump from 5% last year, she added.

More from Invest in You:
Here’s why you should holiday shopping start early this year
Did you blow your budget? Here’s how to get back on track
Here’s the budget this millennial used to save $100,000 by age 25

Many of the volatile assets have seen solid performance in recent days. On Wednesday, bitcoin jumped more than 4% to top $66,893.22, an all-time high for the cryptocurrency. The digital asset is up about 130% year to date.

The asset price was supported by the Tuesday launch of the ProShares Bitcoin Strategy ETF, which tracks bitcoin futures. Other cryptocurrencies have also risen on the positive sentiment. Ethereum jumped about 7% Wednesday to $4,087. XRP and Cardano also gained Wednesday.

Learning while investing

The shift towards favoring cryptocurrency over stocks is being driven by novice investors — 70% of those surveyed have been trading the assets for less than a year, according to Cardify.

Most cryptocurrency investors surveyed wouldn’t consider themselves experts on the digital assets, possibly because some of them are new to the game. A majority said that they only have a limited or moderate understanding of cryptocurrency, despite putting money into different coins.

“It’s a little scary because we’ve got this whole economic underbelly that’s literally built on FOMO [fear of missing out],” said Foucault, adding that Cardify can see an influx of investment in cryptocurrency when there’s a spike in social media mentions, such as when Elon Musk hosted NBC’s “Saturday Night Live” on May 8.

Generally, financial experts would advise new investors to do their due diligence before jumping into a risky asset.

“If you’re seeing what’s going on and you find it exciting but don’t know enough about it to make a decision, continue to educate yourself,” said Douglas Boneparth, certified financial planner and president of Bone Fide Wealth in New York. “Don’t be discouraged; take it as an opportunity to learn more about it to see if it makes sense to you.”



READ SOURCE

Leave a Reply

This website uses cookies. By continuing to use this site, you accept our use of cookies.