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Cryptocurrencies and other digital assets (e.g. non-fungible tokens, NFTs) have established themselves as an alternative asset class for some time now. Today, already 10% of all Germans and 17% of all Swiss citizens own cryptocurrencies, meaning that these are far from being a niche product nowadays.
Particularly in the light of the growing uncertainty in the financial markets, brought on amongst other things by the war in Ukraine and high inflation in Germany, large parts of the EU and the USA, it’s worth asking the question regarding the investment behavior of crypto-investors – and the consequences providers ought to draw from that.
For the first “Strategy& European Crypto Survey”, we examined the investment behavior of a total of 2,000 private crypto-investors in Germany, Switzerland and Turkey in the period from 24 March and 05 April 2022.
For private investors, crypto is already a key component in asset portfolios, and the potential for the investment sector is massive
- Cryptocurrencies are already a relevant asset class today: 50% of those surveyed have invested between EUR 1k and EUR 10k
- Crypto-investors believe in the asset class for the long term: over 80% of the crypto-investors surveyed want to expand their holdings
- Crypto-investors are a customer group with strong potential: over 60% of crypto-investors have also invested in shares and ETFs – including bonds, raw materials, precious metals, derivatives or physical assets
Despite a variety of trading platforms, the current offering is capable of being expanded – for “new” and “old” players in the market
- Crypto-markets and neo-brokers currently split the market between them: the range of providers is relatively fragmented overall, with international crypto-markets (still) in the lead
- Trustworthiness and security are critical in the choice of platform: at 39% and by a clear distance, these aspects are the most important factor for retail investors in their choice of trading platform
- The current offering is capable of being expanded and offers opportunities: one in three of those surveyed see a clear gap in the current market for attractive learning offerings, and a clear opportunity for differentiation
Key implications for banks, crypto-markets and (neo-)brokers
Banks have been hesitant to date, but have massive potential
- Leverage potential with existing customers, prevent migration
- Win new customers through an attractive crypto offering
- Put security and trustworthiness in the foreground
- Develop valuable expertise and licenses for tokenization
For crypto-markets, the challenge is to develop further in order to stay ahead
- Exploit the timing advantage and further expand market shares
- Offer or expand attractive learning offerings
- Exploit relevant information channels for marketing purposes
- Expand the range of offerings, so as not to leave the one-stop-shop approach to other players
(Neo-)brokers will very soon need an attractive crypto offering
- Develop a crypto offering in near time, if not already in place
- Expand tradable assets before offering the product (such as e.g. staking)
- Ensure and promote security of safekeeping
- Win out through a cheap cost structure
Mastering the competition, leveraging potential and optimizing earnings
- The investment volume in digital assets is massive – even after the recent set-backs – and investors are fundamentally committed to what they are doing
- The fees for cryptocurrencies are attractive, although these are set to become cheaper for investors, with a growing range of providers and given the fight for investor market share
- Given the individual starting positions of the various players, the immediate need for action varies individually – but what is clear is that anyone who fails to work on their positioning will be losing their place in the dynamic competition for the income pool
Jens-Peter Nees, Senior Associate at Strategy& Germany, was also involved in drafting this publication.
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