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Analysis
TABLE OF CONTENTS

11 Reasons Why People Buy Crypto

4.1 | by Lim Yu Qian

Why Do People Buy Crypto?

Besides buying crypto for financial reasons, at least 6 out of 10 people buy crypto for its utility, technology and utility to disrupt the establishment.

Overall, people tend to buy crypto for somewhat different reasons than they buy NFTs, even though 3 in 4 crypto holders have NFTs. To give an illustration: For crypto holders, long-term profits is the most important reason to buy crypto, whereas the same group of people consider NFT utility to be the most important reason to buy NFTs.

#1 Profit in the Long Term

Investing was rated as the top reason that people buy crypto for, with 84.8% or a large majority of crypto buyers considering long-term profits to be important to some extent. Crypto has served as a form of alternative investment with the creation of digital gold Bitcoin, and is used as such by around 93.9% of crypto holders.

At least half of crypto buyers felt that profiting in the long-term was ‘Very Important’ (52.5%), which was by far the highest weightage compared to the other top-ranking reasons. This suggests that people might be heavily influenced by the rags to riches stories of successful crypto investors, and expect that putting their money into crypto will allow them to profit over time.

In comparison, just 1 in 5 crypto buyers considered long-term profits to be only ‘Important’ (23.4%) and an even smaller 8.9% deemed it ‘Slightly Important’. People in this group might still buy crypto as an investment, but perhaps with a lower expectation of profits.

9.4% were neutral about buying crypto to profit in the long term, while 5.9% dismissed it altogether. Instead, crypto could be more of a speculative play or entirely experimental.

#2 Other Financial Gains

People also buy crypto to earn from ways besides investing or trading. Benefitting from other financial gains was considered important to various extents for 80.3% of crypto buyers, who likely seek out opportunities in staking, yield farming, lending, learn and earn programs, and more.

15.0% of crypto buyers were neutral about earning through non-investing methods, while 4.7% felt that it was not important at all. Their lack of interest in more niche earning opportunities might be because of skepticism or insufficient gains to meet their requirements.

#3 Savings

Savings ranked as the third most important reason for crypto buyers. 78.9% said they bought into crypto partly as a form of savings, including to hedge against inflation or preserve their capital. 

35.4% said that buying crypto for savings was ‘Very Important’, and 30.7% rated it ‘Important’. In economies with high or even hyperinflation, crypto has become a life-changing way for people to reliably store and access their money, as well as reduce any devaluation. Crypto is also one of the few ways for the unbanked to access financial infrastructure.

Another 12.9% find savings to be a ‘Slightly Important’ reason for buying crypto, possibly because they are starting to explore a bankless lifestyle, or simply want to diversify where they store their money.

Among the remaining crypto buyers, 14.8% are neutral about savings and 6.3% felt it unimportant. The idea of keeping savings in crypto is not compelling or urgent enough for them.

#4 Using Crypto for its Intended Function

The utility offered by the crypto was the fourth most important reason, following close behind savings. At least 3 in 4 buyers said that they would consider how a crypto could be used (77.1%), whether it was for payments, governance, data storage access etc.

This was similar to why people bought NFTs, with 77.6% of NFT holders considering the NFT’s utility to be important. However, NFT utility emerged as the top reason for buying in, whereas crypto utility ranks below financial reasons.

That said, the importance of utility has the potential to outpace financial reasons, as new crypto use cases are built and popularized.

As more and improved crypto utilities appear, there is the potential to change the minds of those who are neutral towards it (14.8%) or do not care (8.2%).

#5 & #6 Enthusiasm for the Business or Technology of the Crypto

As it turns out, there are crypto buyers who think it is important to various extents to factor in their personal enthusiasm for a project’s business model or idea (76.4%), or for its technology (75.9%). 

These two reasons were rated on par with each other, suggesting that buyers viewed a crypto project’s business and technology as equally important. In other words, crypto builders might want to take a holistic approach to their projects, given that it likely affects holders’ support for the crypto.

Some crypto buyers said they were less driven by personal enthusiasm, and were neutral (16.9% and 16.6% respectively) or dismissive (6.8% and 7.5% respectively).

#7 Profit in the Short Term

Making short-term profits was the least important financial reason for crypto buyers, even as 74.7% of them appreciated the ability to speculate with crypto. Speculation lagged behind investment by 10.1 percentage points in terms of importance, which was in line with its relatively lower usage rate among crypto holders.

In comparison, only 66.8% of NFT holders buy because of the opportunity to profit in the short term. This might be because NFTs tend to be seen as collectibles, and attract a more mainstream demographic.

16.2% of crypto buyers were neutral about short-term profits and 9.1% did not care for it at all, representing those who usually do not engage in speculative trading.

#8 Disrupting Established Structures or Industries

Aside from the financial or technological reasons, people who buy crypto also value its ability to disrupt established structures or industries. More than 6 in 10 crypto buyers think disruption is important to some extent (68.6%), indicating that ideologically, people partly get into crypto because they are dissatisfied with the status quo.

In comparison, just 59.5% of NFT holders buy NFTs to disrupt the establishment, which is 9.1 percentage points lower than for crypto. In other words, there is likely a greater demand for disruption among the crypto community, than among the NFT community.

That said, 21.3% of crypto buyers are ambivalent about disruption and 10.1% find it an unimportant factor when buying crypto.

#9 Gain a Stake in the Venture or DAO

65.6% of crypto buyers were motivated by the opportunity to gain a stake in the venture or decentralized autonomous organization (DAO). 

This was 7.3 percentage points less than the 72.9% of NFT holders who were attracted by the same reason for NFTs. In fact, gaining a stake in the venture or DAO was the 3rd most important reason for buying NFTs, compared to ranking 9th for crypto. 

The difference suggests that crypto buyers are less driven by active involvement or contribution, which is in line with governance being one of the least popular ways that people use crypto.

21.8% were neutral about being involved in the venture or DAO and 12.7% considered it unimportant.

#10 Becoming Part of the Community

Joining the project’s community seems to be a less important factor for crypto buyers as well, with just 59.7% considering it when deciding whether or not to buy in.

Unlike NFTs that create value based on branding and depend on community support, crypto projects are technology-driven and depend on whether they can attract genuine users. As such, becoming part of the community is less important for crypto buyers than NFT buyers, by a difference of 9.1 percentage points.

24.4% were ambivalent towards joining the crypto project’s community, while 15.9% disregarded it completely.

#11 Social Good

Having a positive social impact ranked as the least important reason people buy crypto. Even then, at least half of crypto buyers or 56.2% said that they do consider social good to some extent, whether it be philanthropy, sustainability, or other social causes.

Similarly, just 60.2% of NFT holders considered social good to be important to any extent.

On the whole, these responses show that public interest is likely not a priority for the crypto industry, at this stage.

At least 1 in 4 crypto buyers chose to take a neutral stance on social good, and 17.6% dismissed it as unimportant.

Ranking 11 Reasons for Buying Crypto

Rank

Reason for Buying Crypto

Rate of Importance

1

Profit in the Long Term

84.8%

2

Other Financial Gains

80.3%

3

Savings

78.9%

4

Using Crypto for its Intended Function

77.1%

5

Enthusiasm for the Business Model or Idea of the Crypto

76.4%

6

Enthusiasm for the Technology of the Crypto

75.9%

7

Profit in the Short Term

74.7%

8

Disrupting Established Structures or Industries

68.6%

9

Gain a Stake in the Venture or DAO

65.6%

10

Becoming Part of the Community

59.7%

11

Social Good

56.2%

 

Methodology

The study examined 427 responses from the NFT and Crypto Users Survey, jointly conducted by CoinGecko and Blockchain Research Lab from December 2022 to January 2023.


If you use these insights, we would appreciate a link credit to this article on CoinGecko. A link credit allows us to keep supplying you with future data-led content that you may find useful.

Curious to find out more about our previous research studies? Check out this one we did on where people store crypto after the FTX collapse.

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Lim Yu Qian
Lim Yu Qian

Yuqian is a cryptocurrency writer and marketer who specializes in mainstream cryptocurrency insights. She's especially fascinated by the philosophical and socioeconomic aspects of crypto and also goes by the name of Q. She holds a Bachelor of Social Sciences with Honors from the National University of Singapore. Follow the author on Twitter @solosbrqt

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