A brave new wealth
We hosted a town hall to chat about cryptos and alternative investments. Here’s what we learned.
As a digital wealth manager, we can’t turn a corner without being asked about cryptos and the dazzling array of alternative investments that have recently become more accessible to everyday people.
A few weeks ago, we set out to learn more about alternative wealth through an internal deep dive (link). After reading through piles of reports and archaic reddit boards, we were itching for meaningful conversations to better understand things from the ground up.
So we hosted a town hall. And it was fascinating.
For the sake of this post, we’ll be focusing largely on our conversations around bitcoin and cryptocurrencies because it was the dominant theme of the evening. For clarity, we’re not selling crypto products. We’re not giving advice on cryptos. And we’re not crypto experts. We’re just curious.
Context
For starters, it was a sold out event. We had 40 people taking part in a town hall discussion and voting on key questions through an anonymous ballot.
Drum roll please… Here are our findings from the brave new world of alternative wealth.
1) A diversity of voices (for real though)
We regularly host community events and they tend to attract London-ers in their 20s and 30s, mainly in professional services. The word “crypto” or “alternative” seems to open the gates to a more diverse set of people. We had financiers, entrepreneurs, marketers, artists, crypto-geeks, journalists, pensioners, engineers and even a train driver in the room.
Far too often, the investment industry is unrelatable and too focused on a narrow range of clients. This is clearly not the case with alternative wealth. It makes for a much wider tent.
2) Applications? Technology? Blockchain? Don’t care so much…
We asked people to answer a simple question:
“To me, investing in cryptos is like: ”
a) Any other asset. It goes up, it goes down. Just like stocks. 45%
b) lottery ticket. It might *really* pay off. 45%
c) Buying a currency (£, $, €) and I could buy stuff with it. 5%
d) I am buying into new technology. It’s called Blockchain. 5%
e) Bitcoin what? 0%
People clearly lean towards cryptos because of the asymmetric returns — That wasn’t a surprise. However, we were surprised to see how few people were buying into the underlying technology given all the blockchain hype.
3) I’m keen to learn — Where do I go?
We asked our audience, of which half have traded cryptocurrencies before,
“ If you wanted to learn more crypto currencies? Where/who would you go to?”
The room was awkwardly quiet.
It seems like crypto-investors rely heavily on informal reddit boards, chinese whispers, water cooler chat, and medium posts with catchy titles. Some of the reddit die-hards in the room couldn’t even recall the names of key contributors or “must read” threads.
From an outsider looking in, the world of crypto-education looks like a scattered and noisy place.
Of course, cryptos are a volatile security and remain too young and too fast to warrant any formal textbooks per se. But we were surprised to see that there was no definitive authority or central body that people could reliably learn from.
In 1949, Benjamin Graham published a book called “the intelligent investor” that inspired value investors across the world — Not least, Mr. Warren Buffett. Who is his medium/reddit equivalent for crypto? We couldn’t figure it out.
4) Let’s not go crazy here
We asked our audience “… If you had £100,000 to invest. You would invest: ”
a) All of it into stocks and bonds. 7.5%
b) 75% into stocks, bonds, cash. 25% into cryptos/alternative assets. 67.5%
c) 50% in stocks, bonds and cash. 50% into cryptos/alternative assets. 15%
d) 25% in stocks, bonds and cash. 75% into cryptos/alternative assets. 10%
e) 100% into cryptos/alternative assets. 0%
It is interesting to see how people in room perceived cryptos as part of a diversified portfolio. But despite all the crypto hype, people prefer to store the bulk of their “hypothetical” wealth with traditional securities like stocks and bonds. We were also a little bit surprised to see that nobody had the conviction to go all-in on answer e).
5) Dazed and confused
Are mom and pop ready for crypto? Not quite yet. And in my opinion, this was the biggest takeaway.
Cryptocurrencies are a confusing topic and it can all feel very intimidating. Even the early adopters in the room admitted to being overwhelmed by the protocol of keys, wallets, hardware backups, USB sticks, multisignature etc…
Further, many people are baffled by the multitude of coins and frightened by the countless stories of fraud. Simply put, you just can’t pick the good from the bad. And that certainly damages confidence.
In my opinion, simplifying these procedures seems like the most obvious hurdle in making cryptos a bit more “mom and pop” friendly. Of course, there are plenty of apps and platforms working around the clock to make this happen. Many are already there.
A warm summer night
Finally, a sincere thank you to all those who braved through the scorching July heat to join us for an evening of fun filled discussions.
This town hall was a terrific way to have fun and hear about people’s perceptions of wealth beyond the scope of traditional investments. Most importantly, this was an incredible opportunity to learn on the ground floor. The financial industry is often awash with “high level” reports and expert projections but tuning into people’s thoughts and opinions in an intimate townhall felt… refreshing.
And refreshing is nice this time of the year.
Dann Bibas is the co-founder at Fountain, a London based digital wealth manager leveraging new technology to create personalised investment experiences.
