Singaporeans are still actively investing in cryptocurrency despite a hit in overall confidence on the difficult year the industry had in 2022, the 2023 Independent Reserve Cryptocurrency Index (IRCI) found.
Singapore scored 55 on the IRCI this year out of 100, down from the 61 recorded last year. Nevertheless, 44% of Singaporeans hold at least 10% of cryptocurrency in their portfolio, where 46% invest up to $1,000 per month on cryptocurrency, according to Independent Reserve’s poll.
"2022 was a challenging time for the cryptocurrency industry, due to several macroeconomic factors. The collapse of Terra-Luna and the FTX fallout has understandably led to a loss of confidence and trust in the industry,” says Independent Reserve Singapore CEO Lasanka Perera.
Despite the hit in confidence, long-term investors are seeing their persistence paying off — 78% who have been in the market for five years or more saw the value of their cryptocurrency portfolio increase, while 40% of those who have invested in cryptocurrency for less than a year reported losses.
In Singapore, cryptocurrency ownership has increased to 43% from 40% in 2022, with 77% of investors holding two or more different cryptocurrencies. The primary reason for investing in cryptocurrency has shifted towards diversifying portfolios at 54%, a 10 percentage points rise from last year.
That said, the reason for investing in cryptocurrency is also dependent on how seasoned the investor is. For example, investors with over five years of experience cite diversifying their portfolio (68%) and getting rich (48%) as the primary reasons for investing in digital assets.
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In contrast, 50% of new investors with less than 12 months of experience were primarily influenced by the media, family, and friends. Similar to IRCI 2022, price volatility is the top reason why Singaporeans are avoiding investing in cryptocurrency, at 45%.
While awareness of Bitcoin remains the same as last year at 87%, altcoins are steadily gaining recognition. Among all the altcoins, Ethereum continues to be the most popular with 51% awareness — this may be due to the completion of “The Merge” back in September 2022, the growth of non-fungible tokens as well as decentralised finance and decentralised apps.
“The rising popularity of altcoins shows that more Singaporeans are beginning to gain more awareness about other cryptocurrencies apart from Bitcoin. This is a promising sign for the industry as more investors gain exposure to various types of blockchains and projects that have innovative utility and potential to be adopted more widely for real-world applications and use cases,” says Perera.
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Only 8% of investors who earn up to $4,999 per month report investing $1,000 or more per month in cryptocurrency. This contrasts with the 53% of those earning over $10,000 investing $1,000 per month in cryptocurrency, showing that higher income fuels greater investment in the digital assets.
Overall, 23% are investing more than $1,000 per month in cryptocurrency, an increase of 4 percentage points from last year.
Of those polled, the higher-income groups say they have made money from their cryptocurrency investments or have broke even. 67% of those in the $7,000 to $9,000 income segment — who allocated the highest portion of their investment portfolio towards cryptocurrency — claim to have made profit.
Meanwhile, there has also been a significant surge in cryptocurrency ownership among the 46 to 55-year old age group at 55% compared to 30% in 2022. As this age group also reported the highest personal income, this indicates a growing number of people with a higher disposable income willing to invest in the cryptocurrency market, 2023 IRCI found.
Currently in its third year, the IRCI is an annual survey of over 1,500 Singapore residents by independent consumer insights provider Toluna. It is a cross-sectional and unbiased sample of everyday Singapore residents, designed to represent the nation as a whole.
