Is Bitcoin the gateway drug for the crypto market? To answer this question, a look at the latest report of the probably largest crypto-broker Coinbase is needed. The company’s latest report deals with the question of what percentage of investors actually buy Bitcoin directly and whether BTC only opens the door to buying more altcoins.
Find out more details about the importance of Bitcoin and the users’ behavior according to the Coinbase report with the Born2Invest mobile app. Download for free our companion app and get free access to the most important business news from around the world.
60% of Coinbase users start with Bitcoin
As already mentioned, the current Coinbase report forms the basis of this article. The buying behavior of all Coinbase customers who have made at least 5 purchases on the platform was examined in order to complete the report. The investigation period ran from 2019 to 2020.
Let’s first take a look at the so-called “Asset Preference” – Which crypto currencies do customers prefer and is Bitcoin really the entry into the crypto world?
Coinbase report on users’ behavior
The report clearly showed that the absolute majority of 60% of users make Bitcoin their first purchase on the platform. This underlines – at least with the data from Coinbase – the thesis that BTC is the entry point into the crypto market. Nevertheless, it is interesting to note that according to this, 40% of customers buy an altcoin first.
It is also interesting to note that 36% of the customers change to Altcoins afterward (i.e. after their Bitcoin purchase) and thus buy another asset. A good quarter of all customers remain loyal to Bitcoin and do not buy any other cryptocurrencies.
Conclusions and the significance of the report
As to the report itself, it can be said that the period covered by the report was a full year. However, a significant limitation of the informative value is the condition that a customer had to make at least 5 purchases on Coinbase. The figures for all customers, i.e. starting with the first purchase on Coinbase, even if no further purchases followed.
Nevertheless, Bitcoin certainly serves the narrative of the “gateway drug” or, more loosely formulated, the “Altcoin Gateway”. Because of its reputation beyond the crypto market and its certified properties as digital gold and thus also as a store of value, many investors begin their journey into the crypto world with Bitcoin.
BTC remains the dominant cryptocurrency and entry point
The 24% of all customers just mentioned strengthening their positions at Bitcoin in the course of their investor career and thus completely forgoing further altcoins. It would be interesting to see what further information is available about this group. Are these investors who see BTC as a supplement and/or hedge to an existing portfolio? Also conceivable is the type of investors who see Bitcoin as the “only true cryptocurrency” due to its network strength and successful history to date and, therefore, reject the majority of altcoins.
On the other hand, it can be seen that Bitcoin is not only the entry point for the crypto market but obviously encourages many investors afterward to take a closer look at the subject. Subsequently, some of them inform about other cryptocurrencies and projects, so that they supplement their portfolio with further coins.
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First published in CRYPTO MONDAY, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.
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