The original crypto buyers, remembers certified financial planner and founder of Four Pines Financial Trevor Gunter, tended to be “tech-savvy, venture-type investors.” Over time, he found, crypto started to attract a wider range of entrepreneurial investors who weren’t as technical, but who understood risk and reward in service of making some money.
Now, he tells Business Insider, crypto is going mainstream. He has a 99-year-old client, for example, who asked him to buy bitcoin in the past six months. “She wanted to buy her first bitcoin as a 99-year-old,” he says. “And that is obviously something that would not have existed even a couple years ago.”
Below, find five ways experts say investors are approaching crypto for the first time.
1. Crypto has become a foundational investment
In the past, investing in crypto was seen as almost like gambling, says Jovan Johnson, a CFP® and cofounder of Piece of Wealth Planning. “People didn’t even understand it,” he says. “They were just like, ‘Hey, this is popular, let’s do it.'”
But now that more countries are implementing and enforcing regulations and major companies are using crypto, many new investors consider crypto to be a long-term investment. “Some people see crypto as being the future,” Johnson says. “We’re at a crossroads where crypto has been around for a while and people are realizing that it’s here to stay.”
2. New investors are getting investing advice online
Many folks who are new to investing in crypto tend to get their advice on social media and forums, such as TikTok, YouTube, and Reddit.
“It’s an asset where people are talking with their friends,” Gunter says. “You’ll hear things such as: ‘My friend at work told me about bitcoin, so I did it.'”
However, the advice investors find isn’t necessarily bad. Johnson points out that when they’re online, new investors tend to get their crypto advice from short-form content or snippets shared by discount brokerages or crypto exchanges.
3. Some investors want to get rich quick
To younger folks — think those in high school and college — crypto can seem like the magic pill for getting rich fast, says Jackie Cummings Koski, a financial educator and co-host of the Catching Up to FI podcast.
“This is based on what they’ve heard on social media, financial platforms, or from crypto enthusiasts,” Koski says. “They’ve probably heard about crypto — bitcoin in particular — more than any other asset in the last five years.”
And any time you have an asset that has performed to the extent that bitcoin and crypto more broadly has, you’re going to have interest, adds Gunter. “People aren’t always thinking about their financial goals for owning crypto,” he says. “They’re usually more interested in it because so-and-so got rich on it.”
However, any first-time investor would be smart to avoid trying to get rich quick. “I still would say that crypto should be treated as speculative,” Gunter says. Crypto, in his view, should be added to an existing investment portfolio that serves your long-term goals. “And then,” he continues, “if you want to come in and add crypto exposure on top, that makes sense.”
4. Other investors want crypto for diversification
Investors outside the get-rich-quick camp are simply opening their eyes to investment opportunities that go beyond the S&P 500, Johnson says. They’re looking for new opportunities to invest their money and see growth in higher-risk, higher-reward investments.
“Younger people are very interested in crypto because they have that long time horizon,” Johnson says. “And investors, in general, want to find ways to diversify, take slightly more risk, invest in different things — and crypto is good for that.”
And because younger folks typically don’t have a ton of funds to invest, the option to buy fractional shares of a cryptocurrency versus full shares is an attractive option, Koski says. “They’re also willing to just dive in and try right away,” she adds.
5. They want to keep it simple by using platforms
Many investors who are curious about investing in crypto tend to be interested in the most popular coins, like bitcoin, says Johnson. For that reason, they’ll use a trading platform or their usual brokerage instead of a crypto exchange. An exchange can facilitate trading for all kinds of different coins, but it tends to require a little more knowledge and possibly higher fees. For beginners, a platform offering access to the most popular coins is more than enough.
Younger folks who have less money to start with also tend to like investing through a financial app they already use, Koski finds. “If they can easily trade on it, they’ll do it,” she says.