Mark Hulbert: All memes aside, crypto buyers aren’t any different from stock investors

‘For most U.S. households, cryptocurrencies are [now] treated like traditional assets.’

The cryptocurrency market has grown up. We know this because of the type of individuals who invest in bitcoin
and other crypto. According to a study circulated earlier this week by the National Bureau of Economic Research, “crypto investors are not as dissimilar from equity investors as some might believe.”

The study, entitled “Who invests in Crypto? Wealth, Financial Constraints, and Risk Attitudes,” was conducted by Darren Aiello, Mark Johnson and Jason Kotter of Brigham Young University, Scott Baker of Northwestern, Tetyana Balyuk of Emory University, and Marco DiMaggio of Harvard.

This study is important to counter the stereotype that individuals who invest in cryptocurrencies are hyperactive speculators, more likely to jump on board a meme-stock frenzy than engage in the slow and steady accumulation of retirement wealth. While that stereotype may have been more accurate in crypto’s earliest days, it hasn’t been true in recent years.

One reason this stereotype has been hard to dispel is that the data required to confirm or dispute it has not been available. One of the key features of the crypto market, after all, is its anonymity.

The authors of this new study were able to overcome this obstacle by being given access to a database containing the bank and credit card transactions of millions of individual investors. Bayuk, in an email, said this enabled her and her fellow researchers to see whenever individuals transferred money to or from one of the major crypto exchanges, such as Coinbase Global
as well as to or from a traditional brokerage firm such as Charles Schwab, E-Trade, or Fidelity Investments. The database also contained broad demographic information about each account holder (though not his or her identity).

Perhaps the best way to summarize what the researchers found is the chart below. The researchers separated investors in each income cohort according to whether they do or do not invest in crypto, and then averaged the amount each group invested in traditional investments such as stocks and bonds. Notice that the amounts are barely distinguishable.

Another indication of the cryptocurrency market’s maturation is that ownership is no longer concentrated among those with anti-establishment and libertarian views. In the earliest years of crypto, the researchers found, “the concentration of new users per capita was highest in the Rocky Mountain states, Vermont and Oregon.” By 2017, however, new investors in crypto “were concentrated in California and New York,” and by 2021 they “were more evenly spread across the entire U.S.”

The researchers write that “for most U.S. households, cryptocurrencies are [now] treated like traditional assets,” which some crypto enthusiasts may consider a double-edged sword. On the one hand, it means that the crypto arena will not have the same youthful excitement it did in its early days. On the other hand, it means that crypto is now playing on a much more professional field than it ever has.

Mark Hulbert is a regular contributor to MarketWatch. His Hulbert Ratings tracks investment newsletters that pay a flat fee to be audited. He can be reached at

More: Bitcoin is undervalued now — but just look at its projected long-term return

Also read: Bitcoin and ether rally on ETF optimism, sparking hope of a ‘crypto spring’

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