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Study: Most American Millennials Likely to Invest in and Use Bitcoin

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A study carried out by LendEDU, the marketplace for student loans and student loan refinance, revealed that the overwhelming majority of American millennials have heard of bitcoin and are likely to invest in the cryptocurrency in the upcoming years.

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Since early 2016, bitcoin has begun to receive extensive mainstream media coverage from mainstream media networks and news publications. Western newspapers such as the Wall Street Journal began to provide bitcoin price analysis in their frontpage beside the US dollar, Japanese yen, and gold, while network news in South Korea, Japan, and Australia have been providing bitcoin analysis and comparing the digital currency to major reserve currencies and assets.

Subsequently, the mainstream adoption of bitcoin has drastically increased and trading activities around leading cryptocurrencies have grown rapidly. Today, the daily trading volume of the cryptocurrency market is nearing that of Apple, the most liquid stock in the world.

According a new study and survey conducted by researchers at LendEDU, 78.6 percent of Americans have already heard of bitcoin and more than half of American millennials plan on investing in bitcoin in the future.

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“Acting both as a screener question and as a gauge of Bitcoin’s relevance, LendEDU asked 1,000 Americans the following: ‘Have you heard of Bitcoin?’ The vast majority of Americans, 78.60 percent, have indeed heard of Bitcoin. Meanwhile, 21.40 percent of respondents have not heard of Bitcoin,” read the paper.

More importantly, more than half of the respondents expressed their optimism toward bitcoin as a store of value, long-term investment, and safe haven asset, revealing their intent to purchase bitcoin as an investment in the near future.

Last year, Facebook IQ, a team of researchers, scientists and analysts funded and supported by Facebook, released a similar research paper which suggested that millennials are 1.4x more likely to move to emerging financial technology (fintech) platforms and cryptocurrencies such as bitcoin that offer better usability, simplicity, and decentralization. The Facebook IQ research team further noted that millennials have begun to lose trust in banks and major financial institutions.

“To start, Millennials want to feel understood. And it matters because Millennials are 1.4X more likely than Gen Xers/Boomers to switch financial institutions. 45% of Millennials say they would switch banks, credit cards or brokerage accounts if a better option came along.Millennials also feel disconnected from the financial services industry. Many financial institutions have yet to realize that winning over the Millennial generation will require a transformative overhaul—from how each institution views its competition to how it connects with clients,” the paper read.

Many analysts in the bitcoin and cryptocurrency sectors including Max Keiser, Tone Vays, and John McAfee believe that the price of bitcoin will surpass the $100,000 mark and eventually achiev a multi-trillion dollar market cap. Wall Street stragists including highly regarded financial analyst Tom Lee have also stated that the price of bitcoin will likely surge to $25,000 in the upcoming months if the demand toward bitcoin and the cryptocurrency market can be sustained.

If the majority of millennials in the US and other major bitcoin markets such as Japan and South Korea turn toward bitcoin in the next few years as the research of LendEDU states, it will allow bitcoin to grow at an exponential rate and establish a new consumer base that could be sufficient to compete with leading banks, financial service providers, and eventually, the entire global financial industry.

The LendEDU research team noted:

“Interestingly, the numbers jumped a bit when respondents were asked to reveal their future Bitcoin intentions. 17.18 percent of poll participants answered that they “plan on investing in Bitcoin as an asset for the future.” The majority of consumers still have no intentions to own Bitcoin even in the future, but this time it was only 54.58 percent. Additionally, 28.24 percent of respondents do not yet know if they will invest in Bitcoin in the coming years.”

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Fidelity Investments is Mining Cryptocurrency

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Fidelity Investments is a multi-billion dollar brokerage  that just so happens to be mining cryptocurrency. In fact, it has been at it for three years, using its own computers to harvest bitcoin and Ethereum.

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Profitable Experiment

CEO Abby Johnson recently told Fortune that its U.S.-based mining operation is “making a lot of money.” This comes despite running a relatively modest operation.

Hadley Stern, Senior VP of Fidelity Labs, described his company’s venture as an “experiment.”

The real reason we began mining, and still do, is to learn how the network works, how consensus works, how difficulty levels work,” he said in reference to the mining process.

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The key to profitability has been the dramatic rise in cryptocurrency over the past year. Bitcoin and Ethereum are the world’s No. 1 and 2 cryptocurrencies by market capitalization, and no-one else comes close.

Well Ahead of the Pack

The fact that Fidelity has been at this for three years speaks volumes about the company. Other, much bigger players are still dipping their toes in the market, but are unsure about how to proceed. Goldman Sachs is reportedly on the fence about starting a cryptocurrency trading operation, while J.P. Morgan has already begun handling customer orders for bitcoin-based instruments.

Fidelity is doing a lot more than just mining tokens. Earlier this year, it reached an agreement with Coinbase to let customers view cryptocurrency prices alongside other assets on their Fidelity homepage.

Coinbase is the world’s most funded cryptocurrency exchange with more than 7.4 million users.

Cryptocurrency Prices

The cryptocurrency market ended the week on a firm note, with bitcoin (BTC/USD) reaching a session high of $4,425.00. At press time, the index was up 1.6% at $4,368.

Ether is also trading higher against the dollar, with the ETH/USD rallying more than 3% to $305.

Ripple (XRP) lost momentum on Friday, but still managed a weekly gain of 21%.

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Chinese Government Eyeing Fresh Bitcoin Legislation?

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The Chinese government could roll out fresh cryptocurrency regulation in the coming months permitting licensed brokers to operate, based on recent information from Xinhua.

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The state-owned news publication recently revealed that the government is mostly concerned with stamping out illegal activity involving bitcoin and other cryptos. Government authorities could be planning to regulate the market by creating a licensing program with strict Know Your Customer (KYC) and Anti-Money Laundering (AML) systems.

The Case for AML

The need for KYC/AML protocols has long been raised by cryptocurrency proponents, especially in reference to initial coin offerings (ICOs). In response, the blockchain community has come together to create the Simple Agreement for Future Tokens (SAFT). The SAFT is both an instrument and open-source framework for token sales that vets accredited investors.

SAFT activity is quickly gaining traction, with the likes of Gizer recently issuing a presale of its ICO through SAFTLaunch.

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SAFT was officially created by Protocol Labs in close collaboration with AngelList and Cooley.

China’s Stance Looms Large for Cryptocurrency Market

Although digital assets have recovered from the China-induced flash crash of September, favorable regulations on the mainland could mean big business for bitcoin exchanges. Prior to the ban on ICOs and bitcoin brokers, Chinese investors were responsible for a quarter of all BTC trades.

According to Xinhua, China is likely to pursue a licensing program similar to Japan, a country that recently approved 11 cryptocurrency exchanges. CnLedger, a leading source of cryptocurrency news in China, recently had this to say:

“Xinhua News, official press agency of CN: Virtual currencies have become the top choices of underground economies. We shall adopt ‘0-tolerance policies’ towards crimes hidden underneath and take measures such as record-keeping, licensing, AML processes, real-name, limiting large transactions.”

Is China’s cryptocurrency ban temporary? It certainly looks that way. Regulators must already know that the ban hasn’t stopped mainland investors from buying cryptocurrencies next door in Hong Kong or Singapore. A saner approach to an all-out blanket ban is a tighter regulatory framework that will stamp out money laundering and other underground activities.

«Featured image from Shutterstock.»

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Tim Draper Has Made Over $110 Million Since 2014 With his Bitcoin Investment

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Tim Draper, the billionaire technology investor and prominent venture capitalist who has invested in some of the most successful technology startups in the likes of Coinbase, Patreon, SpaceX, Tesla, Box, FourSquare, has profited over $110 million from his investment in bitcoin less than three years ago.

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In 2014, Draper participated in the auction of 144,336 bitcoins by the US government and the US Justice Department, which were seized during the investigation into Silk Road, a dark web marketplace. Draper was granted the permission to purchase a batch of 30,000 at around $600 from the US government.

Upon securing 30,000 bitcoins, Draper told Fox Business:

“[I’m] very excited about bitcoin and what it can do for the world. Bitcoin is as big a transformation to the finance and commerce industry as the internet was for information and communications. If bitcoin were here in 2008, it would be a stability source for our world economy. Everybody should go out there and buy a bitcoin. Every investor who’s a fiduciary should at least be partially involved in bitcoin because it’s a hedge against all the other currencies. There’s a whole ecosystem being built that’s going to make commerce much easier with much less friction and safer.”

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Today, Draper’s 30,000 bitcoins are worth $129.9 million. Considering that Draper had spent $19 million purchasing the batch of 30,000 bitcoins in 2014, Draper has recorded a profit of over $110 million in less than three years.

While Draper held onto his investment in bitcoin, the US Justice Department was quick all of the 144,336 bitcoins seized during the Silk Road operation. According to various sources, the US government sold the majority of its 144,336 bitcoins at a price of $336, at $48 million. If the US government had sold its bitcoins in 2017, it would have generated an additional profit of around $573 million, as 144,336 bitcoins at today’s bitcoin price of $4,330 are worth $624.9 million.

Bitcoin price was below $350 in 2014. Today, it is over $4,330.

Since 2014, in addition to purchasing tens of thousands of bitcoins, Draper has funded some of the most successful bitcoin companies in the cryptocurrency market including Coinbase and Korbit. Earlier this year, Coinbase secured a $100 million investment at a $1.6 billion valuation, while Korbit was acquired by the parent company of a $10 billion gaming company in Nexon at a $140 million valuation.

Furthermore, Draper has not sold his stake in Coinbase and earlier this year, Brian Armstrong, the CEO of Coinbase, revealed that Coinbase is still at an early stage in terms of developing and scaling. Armstrong noted that it will evolve into the safest and most trusted exchange in the global market.

“Digital currencies are having their ‘Netscape’ moment. The pace of innovation has been accelerating and we are now seeing exciting projects and companies being built on top of digital currencies. We’re beginning to transition into phase three of our secret master plan. Our goal is to be the safest, most trusted and compliant, and easiest to use. Not the first to market with new assets. Especially at scale, it takes time to ensure any new asset we add is well tested and secure,” said Armstrong.

Coinbase is also one of the two exchanges in the US market apart from Gemini that is targeting institutional and retail investors by providing sufficient liquidity. As Coinbase and its flagship cryptocurrency trading platform GDAX continue evolve, Draper will position himself at the forefront of cryptocurrency innovation and disruption.

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