39% of US Investors Buying More Crypto Amid Market Volatility

Volatile markets have changed the way investors view their options

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Market volatility is causing 39% of investors to buy more cryptocurrency, a new survey from The Balance has found, as Americans change their investing and savings habits amid a withering economic outlook.

Crypto buyers are bucking the trend to flee for safe havens during times of market volatility; the price of bitcoin has fallen more than 50% since the beginning of the year. Bitcoin, and other cryptocurrencies are generally high-risk, highly volatile assets.

Key Takeaways

  • 40% of investors are investing more as markets are tumultuous
  • Three out of five are fleeing to safer investments
  • 14% are pulling back because they have less money
  • Nearly half of investors under 41 are buying more cryptocurrency

Meanwhile, 41% of investors say they are investing more in stocks in response to today’s market, perhaps motivated by the ability to “buy the dip.” Another 34% say they are making no changes to their investment contributions. 

The Balance surveyed investors between June 30 and July 9, when markets rose just over 2%. 

On the flip side, just over a quarter of the investors surveyed said they are investing less. Nearly 15% said they are pulling back on investing because they have less money, while 9% pointed to inflation concerns. Another 9% told The Balance that they wanted to have more cash on hand as risks of a recession loom. 

Since the beginning of the year, markets have tumbled more than 14%, even slipping into what’s known as “bear market territory” in June. Investors have been jittery as inflation continues to run near 41-year highs, putting increased pressure on the Federal Reserve to raise interest rates to bring inflation down. 

While investors don’t like high levels of inflation, they don’t love rate hikes either; it makes borrowing money more expensive which can slow down business growth. It also increases the likelihood of a recession, which no one wants.

But just because investors are buying more assets, it doesn’t mean they are keeping the same investing strategy. The majority of investors surveyed—60%—said they are choosing safer investments to help them weather the rollercoaster ride markets have taken them on.

While 41% of investors surveyed are choosing to buy more stocks, about a third are increasing purchases of both ETFs and index funds, which are typically less volatile. 

Unsurprisingly, younger investors are more likely to turn to crypto during this uncertain economic time. Nearly half of millennial and Gen Z investors (those aged 41 and younger) told The Balance they are leaning into crypto, compared to just under a third of investors who are Gen X or older. 

Inflation isn’t just changing investing habits. It’s also impacting how Americans save. More than a third of respondents said they were saving less, compared to the 28% that are saving more. Roughly a quarter are cutting back on repaying debt—equal to the portion of people that said they were upping their debt repayment. Half of the respondents said that when it came to their debt, they were making no changes.

Investing during a bear market can be tricky, but there are ways to protect your assets from the volatility of market movements. Less risky investments like bonds could serve you well—bonds have historically performed well during bear markets—while investing in index funds and ETFs are great ways to minimize risk if you would like exposure to stocks. And don’t forget, bear markets provide opportunities for young investors to buy stocks they want to keep for the long term at lower prices.

Methodology

The Balance conducted the survey among 1,200 Americans from June 30 to July 9, 2022. Respondents opted-in to an online, self-administered questionnaire from a market research vendor. To qualify, survey participants had to be 18 years or older and must have at least partially managed their own finances. Quotas were used to ensure national representation for gender, race/ethnicity, region, and generation, using U.S. Census (2019 ACS) estimates as a benchmark. Quotas were also used to match national representation for political affiliation using Pew Research’s American Trends Panel (2022) as a benchmark. 

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Research and analysis by
Amanda Morelli
Amanda Morelli, Director of Brand and Market Insights at Dotdash
Full Bio
Amanda Morelli is the senior director of data journalism at Dotdash (The Balance's parent company), and she oversees development of data journalism projects for publications across the company. She designs and executes original research and analysis, and identifies opportunities and strategies for exploration.
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