Utility, Not Speculation, Defined Growth of Crypto Market in 2021: BTC Markets Investor Study Report

• Exchange sees increase in average value and volume of trades executed in 2021 by 48% and 118% respectively 
• Largest inflow of new clients coming from the mature wealth accumulators aged 45–59-years (79% YoY) in 2021 
• Rise of the ‘Crypto Queens’ – female investors grew much faster than their male counterparts (43pp higher) 
• Young investors embraced the opportunity to buy the dip during market correction in late 2021 
• Growth of sole traders, companies and SMSFs outpace retail investors as industry matures 

Australia’s cryptocurrency industry continues to evolve rapidly according to BTC Markets (BTCM) Investor Study Report 2021 launched today.   

The report is a comprehensive analysis of the data on the BTCM exchange for calendar year 2021, cut by demographics (age, gender, investor type) to anonymously explore and analyse cryptocurrency investment behaviours of its 325,000 clients. 

According to the study, the largest inflow of BTCM’s new clients in 2021 came from Australia’s ‘mature wealth accumulators’ aged 45-to 59-year-olds with a 79 per cent YoY increase. 

BTC Markets CEO Caroline Bowler finds this trend encouraging due to the measured risk appetite of this age group as they start to plan for their retirement. 

“They bring a wealth of experience in traditional investment markets and their decision to invest in crypto is not driven by the fear of missing out (FOMO) but on strategic research and information.” 

Average portfolio sizes continued to remain highest for the 60-plus year-old demographic due to higher disposable income and comfort levels in leaving their crypto on the exchange. 

The BTCM data further showed the continued flattening of gender lines with the ongoing rise of the ‘Crypto Queens’. Female investors on the platform grew much faster than their male counterparts (126 per cent vs. 83 per cent). 

In 2021, their average initial deposits on the platform were higher ($2218 vs $1978 for males), while average portfolio sizes inched closer to that of male investors ($6761 vs $7028). This is despite female investors trading less frequently on a daily basis (2 times vs 3 times for males). 

This behaviour reflects traditional female investment patterns in other asset classes, with women typically taking longer, doing more research, and subsequently investing larger amounts. 

“As our platform shows, women have done their research and are now committing to investment – with a long-term, considered view,” she added. 

Cryptocurrency in 2021: A growth story 

2021 saw a spike in the average value and volume of trades executed on the BTCM platform by 48 per cent and 118 per cent respectively, with the average daily orders increasing by 42 per cent. 

Bitcoin and Ethereum continued to be the most popular tokens, with Tether emerging as a new entrant in the top five traded cryptocurrencies. 

BTCM attributes this growth to more investors recognising the utility story behind cryptocurrencies. Given the decentralised nature of crypto, it is increasingly becoming a popular hedge against rising inflation and low savings rates. 

“Many events in 2021 contributed to making it a watershed year for the cryptocurrency industry in Australia and globally,” Ms Bowler said. 

“Around the world, people are using crypto as a means of payment and a fast, efficient way to remit money. As interest rates look set to rise, crypto’s use as a store of value is being demonstrated as a hedge against inflation. 

“Closer to home, cryptocurrency is being taken seriously at the highest levels of the Government with a series of legislative reforms to foster the industry and improve investor protection. CBA’s entry into crypto via its banking app paves the way for other mainstream institutions to follow. 

“In summary, utility, not speculation is the lifeblood of the crypto ecosystem, and this narrative is now well recognised at investor and government levels,” she added. 

Shaken but not stirred: Investors ‘buying the dip’ 

While market volatility continues to be the number one concern for cryptocurrency investors according to our last report – reactions to this volatility varied across demographics. 

BTCM’s report found that young investors (18–24-year-olds) continued to persist in the crypto market with the highest average initial deposit growth in 2021 ($1150 vs $674, 70% YoY), which was even more pronounced in the second half of the year ($1611 vs $882, 83% YoY). This was despite the second half of 2021 characterised by a severe market correction. 

 “Younger investors have clearly not cracked under pressure, and instead embraced this opportunity to buy the dip,” Ms Bowler said. 

As we go higher on the age curve, the growth of average initial deposits came down, again more in the second half, indicating that older investors were approaching this volatility with caution. 

SMSFs & Companies: In for the long haul 

While individual investors make up the majority of users on the BTCM platform, Sole traders (196 per cent), Companies (79 per cent) and SMSFs (74 per cent), grew faster than Retail (66 per cent) in 2021. 

The size of the SMSF investment also saw a 15 per cent increase with initial deposits now in the hundreds of thousands compared to earlier investments in the tens of thousands, whereas Companies saw an increase in the average portfolio sizes of 61 per cent. 

“This increased commitment from SMSF investors, with their lengthier investment outlook, illustrates a long-term bullish point of view,” Ms Bowler said. 

Anecdotally, BTCM has found an established pattern for new account openings that starts with individuals, then their partners, their SMSF and then their company, as they get more comfortable. 

“Institutional investors and superannuation funds are now in a similar position to where the banks were, and it can only be a matter of time before market developments give them the confidence to embrace crypto,” Ms Bowler concluded.