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Bitcoin fraud recognized: U.S. investors not biting on it

Staff Writer |
Bitcoin, a form of digital currency with nothing to back it up, has made little headway with U.S. investors.

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According to a Wells Fargo/Gallup poll, just 2% of investors say they currently own bitcoin, and less than 1% plan to buy it in the near future.

While most investors say they have no interest in ever buying bitcoin, about one in four (26%) say they are intrigued by it but won't be buying it anytime soon.

These results are from the second-quarter Wells Fargo/Gallup Investor and Retirement Optimism Index survey, conducted online May 7-14, 2018, via the Gallup Panel. The poll is based on U.S. adults with $10,000 or more invested in stocks, bonds or mutual funds, either within or outside a retirement savings account.

Created in 2009 as a form of digital currency outside the realm of central banks, bitcoin has become more popular as a high-risk/high-reward investment than as an online currency - although acceptance of bitcoin for electronic payments is growing.

Bitcoin has yet to make significant inroads into any major subgroup of U.S. investors. Just 3% of men, 1% of women, 3% of those aged 18 to 49 and 1% of those aged 50 and older report owning it.

While ownership is more common among wealthier investors, just 3% of those earning $90,000 or more report owning bitcoin, compared with less than 1% of lower-income investors.

Limiting bitcoin's popularity as an investment, only about three in 10 investors (29%) say they know something about digital currencies. Most of the rest - 67% - say they have heard of these currencies but don't know much about them, while 5% have not heard of them.

The bigger constraint on bitcoin sales is likely the widespread perception that trading in the currency is not safe. While risk is central to how investing works, three in four investors who have heard of online currencies consider bitcoin a "very risky" investment.

Awareness of cryptocurrencies differs by gender and age. Men and younger investors are far more likely than women and seniors to say they know something about bitcoin or other digital currencies.

Related to the age differences, investors with less than $100,000 in investments (who tend to be younger) are more likely to be familiar with the innovation than those with higher asset levels.

Additionally, among the large group of investors who say they have heard of bitcoin, men and younger investors are more likely than their counterparts to say they are intrigued by bitcoin - and less likely to say they're certain they will never buy it.

The price of bitcoin is back on an upswing after crashing earlier this year, causing some to say its bubble is again about to burst and others to argue that its value will only accelerate as more merchants inevitably adopt it.

For now, most investors are on the sidelines, knowing little to nothing about bitcoin. Few are already invested in it, and even fewer plan to jump in soon.

Bitcoin's image as a risky investment may be irresistible to those with the financial means and temperament to assume market-type risks.

But as Wells Fargo/Gallup surveys have found in the past, most U.S. investors prefer to play it safe with their investments, opting for security over growth.

Looking to the future, however, many younger investors who currently say they are intrigued may be converted to investors once the currency goes more mainstream.

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