You Know Why You Buy Bitcoin. Now You'll Know Why Others Do.

A reminder of the important educational work that remains to be done with the general public.

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You are a true Bitcoiner. At least, if you read me regularly, you have a level of awareness about Bitcoin that is above the average of the general public. I'm sure you've figured out the why of Bitcoin. Or at least you are working your way up to that level of knowledge.

That's a credit to you.

However, you should keep in mind that there are only a minority of people in the Bitcoin world who understand the why of Bitcoin. A majority of people in the Bitcoin world still don't understand why, and above all, still think that Bitcoin is just another investment.

An investment with a high potential return, but a speculative investment. This explains why so many people sell their Bitcoin at a loss as soon as uncertainty takes over. These people do not understand that Bitcoin is a unit of wealth independent of governments and central bankers.

Insurance against a major financial catastrophe, as Bill Miller recently reminded us. In his portfolio, Bitcoin now represents 50 to 60%.

Since the concerns of the participants in this market are not all the same, it is interesting to ask what drives other people to buy Bitcoin. That's the point of a study by Block, the company of Jack Dorsey, who is a true Bitcoiner.

You can read the entire survey here: https://block.xyz/2022/btc-report.pdf

Why do people buy Bitcoin?

In early 2022, Block partnered with Wakefield Research to survey 9,500 people in 14 countries in the Americas (North and South), EMEA (Europe, Middle East, Africa), and Asia. Of the respondents, 2,375 were in the Americas, 4,360 in EMEA, and 2,860 in Asia. There were also 100 Bitcoin owners per region.

What emerges is that many people do not forget that Bitcoin is also a means of payment, according to its founding principles. Whether it's sending money to family or buying goods and services.

People with lower-than-average incomes more frequently report using it to transfer money. The trend is clear in countries with the lowest GDP per capita and where a good portion of income comes from remittances. This is something we could already imagine, but it is interesting to see it confirmed with this Block survey.

It is also interesting to note that 47% of women see being able to send money to others as a good reason to buy Bitcoin. As opposed to 27% of men who see it more as an investment.

Overall, the most common reason to buy Bitcoin remains its appreciation potential. Especially for those with high incomes (investment diversification, inflation hedging, appreciation potential):

Not surprisingly, those for whom protection against inflation is a good reason to buy Bitcoin live in countries with high inflation, led by Argentina.

There, inflation reaches 70% per year. That's a 41% drop in purchasing power every year. Saving is impossible, so you have to live from day to day.

So there are good reasons to believe that Bitcoin will appreciate along with the inflation that is now also taking hold in the West. It is already reaching 20% per year in Estonia, an EU member state. Even 73% in Turkey, a G20 member:

Is Bitcoin an exclusive club?

While it is true that men have more BTC than women in America, this is no longer true at a certain level of general culture. In other words, women in higher socio-professional categories own as much BTC as their male counterparts.

As to whether the Bitcoin community is a select group, the responses were similar across income, gender, and age.

That said, things vary greatly from country to country. Indian, British, and Australian respondents feel excluded from the Bitcoin community. But this is not the case in South Africa, Argentina, and China. Rightly or wrongly ...

The study points out that on the American continent, only 33% of those who know one or more Bitcoiners say they feel excluded, compared to 54% of those who do not:

There is no real gender difference between those who are optimistic and those who are not. The more you learn about Bitcoin, the more positive you are about the future of Bitcoin. That's it. This goes back to what I keep telling you: those who doubt Bitcoin or are naysayers simply haven't done enough research to reach the level of confidence to take full advantage of Bitcoin in the future.

High-income earners are more optimistic than low-income earners (46% vs. 37%) in all regions of the world. Interestingly, this optimism gap disappears completely if we don't take into account the opinions of those who know nothing about cryptocurrencies.

Still, note that millennials (people born between 1984 and 1996) are the most optimistic. Baby boomers are less so, but the difference is not drastic. Nigeria, India, Vietnam, and Argentina have the highest rates of optimism about the future of Bitcoin:

Finally, the survey shows that the power of word of mouth is very important. 73% of those who know a Bitcoiner say they will buy Bitcoin in the next 12 months, compared to only 37% of those who don't know anyone.

Not knowing anything about Bitcoin is by far the most common reason for not buying it:

One barrier to adoption that I had already highlighted in the article “4 Barriers to Bitcoin Mass Adoption (and Their Solutions)” is the problem of educating the general public. Many more people than before would like to buy Bitcoin, but still, too many people don't because they don't feel comfortable enough. That's where we need to do a big job of educating the general public as Bitcoiners.

I also bet that the launch of CBDCs by governments will play a positive role in educating the general public about the use of digital currencies. This will ultimately benefit Bitcoin. Indeed, once the general public is accustomed to these digital currencies, they will look for the one with the most advantages. Bitcoin will be the number one choice.

Price volatility, the risk of having Bitcoin stolen, and regulatory uncertainty are also frequently cited. Nearly a third of respondents also believe that BTC is too expensive, probably not knowing that it is possible to buy a fraction of BTC ... Always this work of education that we must do.

Let's finish by saying that 88% of the respondents had heard of Bitcoin, against 43% of Ethereum, 31% of Dogecoin, or 15% of Ripple. This is an interesting initiative from Block. I hope that Jack Dorsey's company will replicate this initiative every year so that we can track the evolution of Bitcoin awareness among the general public.

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Some reading

• Want To Know How To Trade Bitcoin With Success? Follow the Whales. An interesting phenomenon to observe for several weeks now.

• Inflation Is an Opportunity — Use These 5 Inflation Hedges to Take Advantage of It. Every situation represents an opportunity for those who take the right view.

• 4 Stocks Michael Burry Invests in As He Calls the Stock Market a Plane Crash in Progress. And a Tech stock he’s betting against.

• Bitcoin and KYC Policies – Everything You Need To Know (Risks, How To Protect Yourself, …). Whatever your choice, the important thing is to understand where the risks lie.

• KISS Is the Secret the Rich People Apply to Make Big Profits When Investing. The hardest part is not understanding this secret but patiently applying it.