Cryptonation: The Rise of Cryptocurrency Investments in Americans’ Investment Mix

Introduction

Football fans worldwide remember the 2022 Super Bowl as one of the best championship games ever. In the history of the Roman Numeral-enumerated National Football League (NFL) championship games, Super Bowl LVI - that's number 56 to you and me - stands out for many reasons. The Los Angeles Rams finally won their elusive first Super Bowl. Sean McVay became the youngest Super Bowl-winning coach ever. Matthew Stafford, who long toiled in virtual anonymity as the quarterback of the seemingly forever losing (until this year!) Detroit Lions. And yes, Joe Burrow solidified his star status and the Cincinnati Bengals gained a whole lot of respect in a valiant losing effort in a game that was literally decided on the final play of the game.

In short, the 2022 Super Bowl was everything one could wish a Super Bowl to be - an exciting game…

…. with a great, star-studded halftime show…

… and, of course, a ton of creative commercials for the event that draws the most eyeballs to live television each and every year! In fact, over a hundred million Americans watch the Super Bowl each year. This consistently makes the NFL championship game the best “tentpole event” for advertisers to find an audience at the same time in a world with not just 500 channels, but basically every piece of content ever made by man - or now AI - available at our fingertips!

And while some Super Bowl commercials become iconic, such as the Budweiser Clydesdales…

…or the E-Trade baby….

Super Bowl LVI, beyond the great game itself, is probably best remembered by Americans for one thing even today, more than a year and a half removed from the event. What made this Super Bowl even more memorable was the collection of crypto company commercials on our TV screens that filled the gaps in the action on the field. In fact, marketing and advertising experts dubbed the 2022 game the “Crypto Bowl.”

The 2022 Super Bowl truly became crypto’s “coming out party,” where cryptocurrency companies became mainstream, advertising en masse on sports - and live television’s - biggest day. In doing so, not through a grand strategy, but as rivals competing for the hearts, minds, and yes, real dollars of Americans, crypto companies gained a foothold in both popular culture and in the minds of Americans like never before (never doubt that Super Bowl ads do work!). Even though interest - and yes, investing in crypto was growing before February 13th, 2022 and Super Bowl LVI, crypto ads - even funny ones - on the Super Bowl’s global platform made cryptocurrency a mainstream subject of conversation - and attention!

First, there was Coinbase, which spent millions on a 60-second Super Bowl ad to simply display a QR code bouncing across the screen to simply entice viewers to scan the code to learn more about - checks notes - Coinbase…

Then there was Matt Damon, encouraging today’s investors to not be among those in history who “almost adventured,” but rather, to dare to do so. After all, as the Oscar-winning actor said, for Crypto.com, “Fortune favors the brave”...

Then there was Dogecoin, which had a Pre-Twitter (or X) Elon Musk and yes, President John F. Kennedy together somehow to voice an ad comparing the move to crypto to the original moonshot, wish Musk declaring that Dogecoin could become “the currency of Earth in the future”...

And yes, there was Larry David, saying what many Americans believed in that crypto was not “a thing” for FTX - but that you - as an investor - “don’t want to miss out”...

Speaking of FTX, there was a slew of “A-list” sports celebrities who endorsed the cryptoexchange, including Steph Curry…

…and Tom Brady.

Coinbase and Crypto.com survive today as leading cryptocurrency exchange platforms. However, we now know that the story seemingly didn’t end well - to say the very least - for FTX, the failed high-profile crypto company led by the now-convicted Sam Bankman Fried that collapsed less than six months after Super Bowl LVI in July 2022…

We also know that Tom Brady and Steph Curry are among the celebrities being sued by investors for their association with - and endorsement of - FTX (and yes, by default, Sam Bankman Fried)…

We also know, as we always do in retrospect when these things happen, that there was indeed a bigger “Crypto Bubble” that popped not all that long after the “Big Game!”

In other words, one who follows the news might well assume that crypto - if not dead - is at best plugged into life support, as are all the many millions of computers worldwide that are generating more and more crypto assets. But that would be wrong, very wrong today, for as the saying goes, well, you know what happens when you assume!

Cryptonation

Crypto is still here though, and by most investment metrics, doing phenomenally well overall. Today, all forms of cryptocurrencies and crypto assets are playing a seemingly larger and larger role in the finances of more and more Americans - a role as big or even bigger than what has been heretofore considered to be “traditional” investments.

Speaking of traditional ways to invest your money…as you can see in Figure 1 (Percentage of Americans Who Own Different Classes of Financial Assets, 2023), it is not a surprise that the headline number highlighted by the excellent data analysts at Statista was that almost half of all Americans still have a traditional savings account. Certainly, in the present environment, where these accounts pay 3, 4 or even 5% annually now in 2023 - far more than the paltry interest (often at .01-05% rates, maybe 1% if you were lucky or a “jumbo” saver) that these vehicles had paid deposit holders for the past decade, these traditional savings accounts are much more attractive for savers than in recent years.

Figure 1: Percentage of Americans Who Own Different Classes of Financial Assets, 2023

Source: Statista, “Americans Trust the Savings Account,” November 2023 (Used with permission).

To me, as a strategic management consultant and professor, the bigger story is just below that topline figure. What financial asset type is the second most common for Americans to own today? Cryptocurrency - despite all the negative press about it, despite all the market volatility that has characterized the crypto market, despite all the concerns from policymakers about the lack of oversight and regulation of what is today still a “Wild, Wild West”-type of market, and despite the high profile falls of crypto companies, crypto executives, and yes, even crypto celebrities - despite all of this, it might surprise you that approximately 1 in 5 Americans now own cryptocurrency - full stop! It might also shock you that just as many Americans own crypto - in one form or another - as do own individual stocks and equities held in their mutual funds! And that 17% of Americans who have at least one crypto investment is an even more amazing number when one considers that this is a higher percentage than those in the U.S.:

• who have life insurance (16%);
• who own real estate (15%), and/or
• who have any other form of capital investment (e.g. bonds, options, etc.) (11%).

What is the icing on this amazing statistical cake? It has to be the “gold” number. Consider the fact that today, almost double (17%) of Americans have crypto as part of their financial holdings as compared to the most valuable, most stable, and yes, oldest form of investment known to man - gold (9%)! So, consider the fact that far more Americans own - and by definition, trust - an asset that was invented just over a decade ago over one that has been a store of value across the centuries globally. Consider that this asset is as ethereal as one can get, as opposed to gold, which is, well, not hard as a rock, but very, very close to its rocky origins!

Yes, the world - and investor attitudes - are changing - and changing very fast - maybe even at the speed of light in what is now, more and more each day, “Cryptonation!”

Today, the top ten ranked virtual currencies, based on market capitalization are:

1. Bitcoin (BTC)
2. Ethereum (ETH)
3. Tether USDt (USDT)
4. Binance (BNB)
5. Ripple (XRP)
6. Solana (SOL)
7. USDC (USDC)
8. Cardano (ADA)
9. Dogecoin (DOGE)
10. TRON (TRX)

Table 1 - The Top 10 Cryptocurrencies, Market Cap, Market Share, and Current Price (As of November 2023)

Source Data: Slickcharts, Cryptocurrency Market Data, November 2023.

Yes, crypto prices have largely recovered from the “depths of despair” felt in the cryptocurrency market generally in mid-2022. In fact, the total capitalization of the cryptocurrency market today (as of mid-November 2023) stands at exactly $1,416,718,380,399 - or more clearly, $1.4 trillion dollars, kids! As you can see in Table 1 (The Top 10 Cryptocurrencies, Market Cap, Market Share, and Current Price [As of November 2023]), the top ten cryptocurrencies alone account for the lion’s share (over 85%) of that market cap, totalling over 1.2 trillion dollars. Bitcoin alone has over half of the crypto market share, and it and Ethereum combined hold over two-thirds of the total $1.4 trillion market cap for all virtual currencies!

Figure 2 - Bitcoin Price, 2011-2023

Source: CoinMarketCap, Bitcoin Prices, November 2023 (Used with permission).

And the market performance of the most prevalent cryptocurrency, Bitcoin, is nothing short of amazing, something that investors - even the most cautious and conservative among us - simply have to take note of. Consider that today, each Bitcoin is worth over $37,000! As you can see in Figure 2 (Bitcoin Price, 2011-2023), had you bought Bitcoins at the very beginning of the virtual currency in 2009 at $.000999 - or one-tenth of a cent - and held onto your crypto coins until the present day, you would have experienced - please, please make sure you are sitting down for this number - an astronomical 60,058,286% return on your investment (no, that's not a typo)! Likewise, had you bought Bitcoins at just over $5 in 2011 (the starting date of actual price tracking) you would have seen a return of 639,516% in just 12 years. In either instance, you would likely not have a need to read any article about investing today, as you would be set for life!

Looking a bit more short-term, certainly, today’s Bitcoin price of $37,136.09 (again, writing in November 2023) is well short of the prior peaks for Bitcoin ($64,863.98 on November 11, 2021) and then the more recent peak of $47,062.15 on March 30, 2022 (just before the cryptocrash). However, the current value of a Bitcoin is 86% of what it was pre-crash, so the recovery in just over 18 months has been impressive by any measure in comparison to say stocks and bonds recovering from a correction or even a crash in those markets. And so when today’s investors look at assets and assess their risk and returns, it is no wonder that cryptocurrencies are, in late 2023, considered perhaps more stable and vibrant than what may, in truth, be risky times in more traditional (i.e. safer) investments, ranging from commercial real estate to the stock and especially the bond markets. Risk is perceived, and today’s investors - chastened by the Great Recession and COVID and yes, more comfortable with the concepts of tech in general and the idea of digital and virtual “stuff” than any prior generation - might just see virtual assets as less risky than physical ones!

Analysis

So, as a “strategic management guy,” let's try and put a bit of context around the fact that Americans today are showing a continued, strong interest in holding crypto assets as part of their overall investment portfolios - whether they have hundreds, thousands, millions, or even billions of dollars in total personal assets. First though, I have to say that lest you doubt that the numbers here are “off,” the Statista Consumer Insights Survey is representative - very representative - of the U.S. population as a whole right now! In statistical terms, their panel has 10,000 respondents, distributed to mimic the entire American population based on a mix of demographic variables (age, gender, ethnicity, income, etc.). And so their recent report on Americans’ personal investment holdings is not - by any means - a “one-off” or an outlier. Rather, it paints a picture of a changing investment landscape - and outlook - in the United States - a perspective that all of us, whether you are an investment professional or just a personal investor, need to first, be aware of, and secondly, think about how you can use this market knowledge to your best advantage.

The bottom line is this: Crypto has survived the “storm” of the almost past two years since its “coming out party” with all the ads in the Super Bowl LVI telecast. As a “brand,” crypto in general - maybe not so much the specific forms of cryptocurrencies, but the general concept of crypto assets, has been damaged with more “incoming!!!!” than really any brand today. And still…interest in crypto is still strong - and growing - even in the face of what has been often chilling, seemingly catastrophic news impacting the overall crypto brand in the news of the day.

Now, the Statista report I cite as the basis of this article is brief, and it doesn’t (in the publicly available “free” form) allow for me to go into a “deep dive” on the matter of precisely who is investing in which - or which assortment - of financial assets to be more specific. And so yes, a breakdown of cryptoholders by age, gender, income levels, occupations, education, etc. would be very beneficial (and it is likely my next big research project).

For now though, it is safe to say that with almost 1 in 5 Americans presently owning at least one form of crypto asset, crypto is a major part of investors’ portfolios and their investment thinking today - and will be going forward. One might think that it would be safe to assume that younger investors will be the most likely to gravitate to a digital asset as they have been raised, educated, worked, and lived in a world that is more and more digital every day. However, one should not assume that just those under 30 or 40 would be comfortable with crypto assets as part of their investment portfolio (again, don’t assume!).

Perhaps then, Larry David was wrong about crypto, and yes, perhaps fortune does favor the brave! The message today is clear: Cryptonation is here, and you, as a financial professional or as an individual investor, need to consider how crypto can - and perhaps really should be - a part of your - or your clients' - financial planning moving ahead. Crypto, as an asset class, is rising. So, what are you going to do with this info - today?

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About David Wyld

David Wyld is a Professor of Strategic Management at Southeastern Louisiana University in Hammond, Louisiana. He is a management consultant, researcher/writer, publisher, executive educator, and experienced expert witness. You can view all of his work at https://authory.com/DavidWyld. You can subscribe to his Medium article feed at: https://davidwyld.medium.com/subscribe.

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