Who invests in crypto assets in Asia, why do they do so and how do they do it? This article aims to answer just that with data from the OECD's latest report on Cryptoassets in Asia, in which they studied crypto asset owners in Vietnam, Malaysia and the Philippines.
Who or what is the OECD? The OECD or the Organisation for Economic Co-operation and Development is an intergovernmental economic organisation with 37 member countries, founded in 1961 to stimulate economic progress and world trade.
Why do they (and why should we) care about crypto assets? Good question. With the ever-changing financial landscape, even large international organisations such as the OECD are looking into how digital financial products such as cryptocurrency assets are changing the way people think about and use technology-driven financial products in order to develop better financial products and services, prepare enhanced financial education and provide greater consumer protection.
The same can be said for us. Here at Remitano, we're always looking for ways to improve your experience when using our products --- be they our secure, instant peer-to-peer exchange platform or our altcoin investment avenue. It's free to create an account with us and super low transaction fees are assured.
This article is organised into three parts:
Who's investing in crypto assets in Asia?
Why do investors in Asia buy crypto assets?
Where or how are investors buying such assets?
Let us begin.
Following the OECD's report, the term "crypto assets" used in this article refers to private assets that rely on cryptography and distributed ledger technologies. More specifically, they refer to cryptocurrencies and initial coin offerings (ICOs) for the purpose of this article.
The data shared in this report is based on a survey of 3,006 respondents aged 18 and over living in Malaysia, the Philippines and Vietnam (~1,000 per country). The survey was conducted in February and March 2019.
Source: pexels.com
80% of all respondents surveyed said that they were aware of cryptocurrencies, with Malaysia leading the way at 84%, followed closely by Vietnam with 82% and the Philippines at 74%.
Meanwhile, only 46% of all respondents said that they were aware of ICOs, with Vietnam leading the way at 59%, followed by Malaysia at 40% and finally the Philippines at 38%.
While a significant majority of respondents are aware of crypto assets, only 30% of them actually own cryptocurrencies. Interestingly, while the Philippines lags behind the other two countries in terms of awareness, it makes up for it through a higher rate of ownership.
Indeed, 32% of respondents from the Philippines say they currently hold cryptocurrencies --- only slightly lower than Vietnam's 35%. Meanwhile, only 23% of Malaysian respondents own cryptocurrencies.
The 25-34 age group lead the way in terms of crypto asset ownership in the region. However, the percentage varies across countries, with the 45-54 age group representing 51% of cryptocurrency holders in the Philippines.
While men represent the majority of crypto asset holders in both Malaysia and the Philippines, women trumped men in terms of ownership in Vietnam.
The study also found that cryptocurrency holders tend to be employed and university-educated.
Source: unsplash.com
Coming in as the number one reason at 41% is "to make money quickly", followed by "to know more about cryptocurrencies" (34%), and "to use as a means of payment for online purchases" (32%). This was followed by
"to diversify my overall investment portfolio" (27%);
"as a long term investment or retirement fund" (26%);
"to support initiatives that build on blockchain technology" (15%);
"just for fun" (14%), "to make domestic or cross-border money transfers" (13%);
"to provide an inheritance" (7%); and finally
due to a "fear of missing out" (6%).
And why do investors invest in ICOs? Unsurprisingly, "to make money quickly" also came in on top at 42%, followed by
"to know more about ICOs" (34%);
"I believe in the project making the offer" (31%);
"to diversify my overall investment portfolio" (30%);
"as a long term investment or retirement fund" (29%);
"to support initiatives that build on blockchain technology (25%);
"just for fun" (12%);
"fear of missing out" (11%); and
"to provide an inheritance" (11%).
Source: unsplash.com
First, let's find out where investors get their information from before investing. According to respondents, the online articles (30%) and social media platforms (30%) are their main sources of information for cryptocurrencies. This is followed by
online advertisements (19%);
general conversations with non-experts (7%);
printed articles (3%);
tv or radio programme (3%);
general conversations with financial or digital experts (3%); and
investment guidance from a professional (2%).
Similarly, investors' main source of information for ICOs are social media platforms (35%), online articles (23%), and online advertisements (17%), followed by printed articles, general conversations with experts or non-experts, offline advertisements, and investment guidance from a professional (all below 7%).
How did those who say they have owned cryptocurrencies acquire such assets in the first place? 59% of respondents say they "bought them on an online platform" with Malaysian and Vietnamese respondents leading the way at 68% and 67% respectively, followed by the Philippines at 43%.
Interestingly, a significant portion of respondents also acquired their cryptocurrencies by mining them --- with Vietnam and the Philippines leading the way at 39% and 37% respectively, followed by Malaysia at 26%.
After buying them and mining them, respondents say that they acquired cryptocurrencies when they "received them in payment for goods and services (22%), "bought them at a dedicated kiosk" (15%), or received them when they were "transferred to me from family or friends" (11%).
And finally, the study found that most respondents either used some of their savings (46%) to acquire said cryptocurrencies or used some of their normal monthly budget (44%) to do so.
Others acquired their cryptocurrencies by selling some of their assets or investments (14%), by paying for it with a credit card (13%), by taking out a new loan (4%), or by borrowing from family and friends (3%).
