To some millennials, investing in the stock market sounds as antiquated and austere as a flip phone. While there are undoubtedly many people who invest in stocks, consumers are becoming more enthusiastic about investing in cryptocurrency. And with easy-to-use apps to trade cryptocurrency, millennials are driving the trend.
We looked at the online conversation about personal finances to analyze the shifting preferences in investing and the demographics that are driving the change.
The Rise of Cryptocurrency Trading
Comparing the social conversation about stock trading and cryptocurrency trading, there is a clear change in consumers’ investing preferences. From 2010 to 2012, nearly all of the discussion was centered on trading stocks. But something changed starting in 2012: consumers began paying attention to cryptocurrency, particularly bitcoin. By 2016, cryptocurrency trading made up 16 percent of the trading conversation. That number rose to 50 percent in 2017, then 72 percent in 2018.
Preferred Platforms for Cryptocurrency Trading
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As bitcoin trading becomes more popular, more trading platforms have sprung up to accommodate the demand. Coinbase is the most discussed, with 72 percent share of voice. Launched in July 2011, it has provided bitcoin traders with a digital currency exchange since the early days of cryptocurrency. The second most popular platform is Binance, with 21 percent share of voice. Binance launched in July 2017, and has quickly gained popularity for its reliability. Kucoin, launched in September 2017, has 3 percent share of voice. Consumers noted its similarity to Binance. Robinhood, though not a bitcoin-specific app, announced in February 2018 that it will support bitcoin trading. Robinhood and Cex.io both make up 2 percent of the bitcoin trading conversation.
It’s not just startups that are supporting bitcoin trading; large banks like Goldman Sachs and JP Morgan are developing a bitcoin strategy, after recognizing its sizable impact in financial markets.
The cryptocurrency audience is significantly younger than the stock-trading audience. While 23 percent of those discussing trading cryptocurrency are under 25, only 7 percent of those trading stocks are. Nearly 90 percent of those trading stocks are 35 and above; that number is 73 percent for cryptocurrency.
The cryptocurrency trading audience is slightly more male than the stock trading audience, but just barely. What about the audience interests?
The interests also differ between the stock and cryptocurrency trading audiences. Those investing in stocks are, predictably, more interested in the stock market, financial services, and real estate. They read Forbes and watch CNBC. Those investing in cryptocurrency, on the other hand, are interested in technology like peer-to-peer platforms, open source, hacking, and game development. They also have libertarian tendencies, with a strong interest in Ron Paul.
Cryptocurrency has taken off, and its rising popularity is reflected in the online discussion. Bitcoin, in particular, is reviving the conversation about trading. By looking at the online cryptocurrency trading conversation, we are able to detect trends in trading, understand what’s driving those trends, and analyze the audience. Brands can harness this information to better understand how financial services and markets are changing and consequently adapt.
For more information on financial services, check out our blog post: How Financial Services Brands Attract Millennials