Cryptocurrencies are losing some of their appeal as a long-term wealth-generating asset.
This follows from the 10th Bankrate’s annual survey of Americans’ favorite long-term investments for building wealth. Just 6% of the 1,025 survey respondents chose crypto as their top long-term investment, up from 9% in 2021.
It was the least popular among the options given, which included real estate, stocks, bonds, gold and other precious metals.
“When prices were going up, the preference and views on cryptocurrencies were much more positive,” says Greg McBride, chief financial analyst at Bankrate.com. “Now that prices are falling, that picture has reversed, even for younger investors.”
Cryptocurrencies have been in free fall in recent months, with the prices of most currencies collapsing and major players going bankrupt.
So what are investors turning to?
Perhaps unsurprisingly, property was the top answer in this year’s Bankrate survey, with 29% of respondents saying it was their preferred way to invest money they won’t need for at least a decade. That could mean buying a real home, or investing in a REIT or other mutual fund, McBride says.
Real estate has been the top answer for investors in three of the last four years, according to Bankrate. It’s a particularly attractive option for millennials, with 33% choosing it as their top investment choice. McBride doesn’t see this changing anytime soon, given that millennials are at the best age to buy a home and that demand has been so strong in recent years.
“The question has been asked: ‘Are we facing a housing bubble?” says McBride. “The demographics suggest that demand will remain strong for years to come.”
The stock market, despite its volatility, also remains a top choice for investors looking to build long-term wealth. More than a quarter of respondents, 26%, chose equities as their top choice, up from 16% last year.
While this may seem counterintuitive given that the market has fallen so much compared to last year, McBride says long-term investors are less spooked given that they have just seen the market rebound during 2020.
“In the past, investors have tended to be more responsive to volatility,” he says. “2022 has proven to be an anomaly, but a good anomaly.”
Cash was the third most popular choice, with 17% of investors choosing it as their best long-term investment, up from 25% in last year’s survey.
by Alicia Adamczyk for FortuneMagazine