Crypto Market Commentary
1 May 2019
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Mind Of Mav
Bitcoin: The Demographic Megatrend
If you’ve been in the marketing world for a while, you’ve probably heard of the Rule of 7.
It’s been proven over and over that the more positive contact you have with customers and prospects, the easier it is to develop and sustain relationships and ultimately, close more sales.
The Marketing Rule of 7 states that a prospect needs to “hear” the advertiser’s message at least 7 times before they’ll take action to buy that product or service. It’s a marketing maxim developed by the movie industry in the 1930s. Studio bosses discovered that a certain amount of advertising and promotion was required to compel someone to see one of their movies.
So what’s that have to do with Bitcoin and Blockchain?
Well, you’re probably a living example of this.
Many I’ve talked to over the years about blockchain detailed how they heard about it multiple times before they decided to investigate it and learn about the breadth of information and innovation that had been built up.
Especially when those first couple points of contact had negative connotations, it is significant to account for the “about face” in some people’s perception. Silk Road, Mt.Gox, historical crashes, bear markets, scams, ponzi schemes, and a myriad of other negative news stories likely were your first interaction with this space.
And yet, here we are. Something changed our minds, be it an article, a friend, a news report, something.
And we’re not alone.
The general perception trend among adult in developed nations regarding blockchain has been increasing, despite the span of negativity and bear market blues.
Despite the bear market, the data shows that Bitcoin awareness, familiarity, perception, conviction, propensity to purchase and ownership all increased/improved significantly — dramatically in many cases.
I’m going to draw on Spencer Bogart’s article which details this survey and the methodology, but we’re just going to focus on the interesting bits.
The survey was conducted online by The Harris Poll, on behalf of Blockchain Capital, from April 23–25, 2019 among 2,029 American adults. The survey was an augmented version of one they ran in October 2017.
For context and because it’s material in considering the results, the survey in October 2017 was conducted in a bull market — Bitcoin was up over 800% YoY — whereas the most recent survey, in April 2019, was conducted in a bear market — price was down roughly 75% from all-time highs.
They suspected that the difference in market environment between the two surveys would have a negative impact on Bitcoin sentiment in the most recent survey.
What they found was not quite that.
The results highlight that Bitcoin is a demographic mega-trend led by younger age groups. The only area where older demographics matched younger demographics was awareness: Regardless of age, the vast majority of the American population has heard of Bitcoin.
So let’s get into each of the survey fields:
The percentage of people that have heard of Bitcoin rose from 77% in October 2017 to 89% in April 2019.
Awareness of Bitcoin is strong across all age groups — those aged 18–34 have the highest rates of awareness at 90% and those aged 65+ have the lowest at 88%.
Overall, the percentage of people that have not heard of Bitcoin fell by more than half — from 23% in October 2017 to 11% in April 2019.
The percentage of people that are ‘at least somewhat familiar’ with Bitcoin rose by nearly half — from 30% in October 2017 to 43% in April 2019.
Among those aged 18–34, a full 60% described themselves as at least ‘somewhat familiar’ with Bitcoin — up from 42% in October 2017. Relative to older segments of the population, those aged 18–34 are 3x as likely to be at least ‘somewhat familiar’ with Bitcoin as those aged 65 and over.
The natural follow-on question is how perception is affected by rising awareness — as people become more familiar with Bitcoin do they think of it more positively or negatively?
The percentage of people whom ‘strongly’ or ‘somewhat’ agrees that ‘Bitcoin is a positive innovation in financial technology’ rose 9 percentage points — from 34% in October 2017 to 43% in April 2019.
Younger demographics were most inclined to have a positive view of Bitcoin: 59% of those aged 18–34 ‘strongly’ or ‘somewhat’ agree that ‘ Bitcoin is a positive innovation in financial technology — up 11 percentage points from October 2017.
But even if an increasing percentage of the population has a positive perception of Bitcoin, does that translate to increased conviction in future adoption?
The percentage of people that ‘strongly’ or ‘somewhat’ agrees that ‘most people will be using Bitcoin in the next 10 years’ rose 5 percentage points — from 28% in October 2017 to 33% in April 2019.
Younger demographics have the most conviction in adoption over the next 10 years: Nearly half (48%) of those aged 18–34 ‘strongly’ or ‘somewhat’ agree that ‘it’s likely most people will be using Bitcoin in the next 10 years’ — up 6 percentage points from October 2017.
Propensity to Purchase
Despite the bear market, the percentage of people that indicated they are ‘very’ or ‘somewhat’ likely to buy Bitcoin in the next 5 years rose by nearly half — from 19% in October 2017 to 27% in April 2019.
Younger demographics appear most inclined to purchase Bitcoin: 42% of those aged 18–34 said they are ‘very’ or ‘somewhat’ likely to purchase Bitcoin in the next 5 years — up 10 percentage points from 32% in October 2017.
It’s also helpful to consider how people think about Bitcoin relative to other investable assets.
When asked which they’d prefer to own $1k of:
o 21% of people said they would prefer Bitcoin to government bonds — up from 18% in October 2017
o 17% of people said they would prefer Bitcoin to stocks — up from 14% in October 2017
o 14% of people said they would prefer Bitcoin to real estate — up from 12% in October 2017
o 12% of people said they would prefer Bitcoin to gold — up from 8% in October 2017
Focusing on those aged 18–34, when asked which they’d prefer to own $1,000 of:
o 30% said they would prefer Bitcoin to government bonds — flat from October 2017
o 27% said they would prefer Bitcoin to stocks — flat from October 2017
o 24% said they would prefer Bitcoin to real estate — up from 22% in October 2017
o 22% said they would prefer Bitcoin to gold — up from 19% in October 2017
Said differently, among those aged 18–34: Nearly 1 in 3 prefers Bitcoin to government bonds, more than 1 in 4 prefers Bitcoin to stocks, nearly 1 in 4 prefers Bitcoin to real estate and more than 1 in 5 prefers Bitcoin to gold.
The biggest increase in preference rate for Bitcoin was relative to gold — perhaps the byproduct of Bitcoin’s growing acceptance as ‘digital gold’.
In total, 9% of the population owns Bitcoin — including 18% of those aged 18–34 and 12% of those aged 35–44.
To help put the millennial proclivity to Bitcoin in perspective: Only 37% of people under 35 are invested in the stock market (source) — so the data point that 20% of those in the same group own Bitcoin is particularly surprising.
Ultimately, Bitcoin is a demographic mega-trend: Younger demographics are leading in terms of Bitcoin awareness, familiarity, perception, conviction, propensity to purchase, and ownership rates.
I find these sorts of surveys fascinating, even if I don’t fully believe that 2,000 people are truly representative of the thoughts and feelings of 330,000,000.
But, needless to say, despite whatever the bear has thrown at us, we have persisted and we are growing.
And that’s pretty exciting to see.
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