The Windfall Game — Stocks, Gold, Cash or Bitcoin?
The Windfall Game survey was conducted by Hotspex on behalf of myself & Xsquared Ventures. It was conducted in February 2020, answers given by American adults.
You can download the PDF here.
The questions in the Windfall Game survey were inspired by the annual Twitter poll that Ron Paul has been running since 2017.
For the last 3 years, Bitcoin has won Ron Paul’s contest, but the results are hardly scientific. It’s more a measure of how engaged Bitcoin evangelists are online — we vote Bitcoin & share the poll to our Bitcoin loving networks.
We in the space have certain general assumptions about the way people think about Bitcoin. Are women actually less interested in Bitcoin than men? Are Boomers a lost cause? Since Gen Z are digitally native, are they more interested in Bitcoin than Millennials or Gen X? Do wealthy people know more about Bitcoin since they are investment-minded?
If we want to understand how to position Bitcoin for wider adoption, we need to understand how different demographics respond to Bitcoin eduction.
To that end, I recently commissioned Hotspex, a top market research firm, to run a survey with the aim of better understanding how the different demographics & generations think about Bitcoin.
My hope is that the survey results will help Bitcoiners, companies & evangelists craft more effective education & relevant messaging based on demographics to more positively affect mass adoption.
The Methodology.
The expanded questionnaire is designed to see how the average person would answer the windfall question with as little bias as possible.
Respondents from this survey were men & women in the USA, they were incentivized to answer the survey with payment in USD. The survey was in-market between Feb 7 — Feb 8 2020.
The questions are designed to ask thought provoking questions about the way our financial system operates, measure how much a person thinks he or she knows about these topics, while dripping easily digestible education on them throughout the process of the survey.
At the end of the questionnaire, after they’ve been stealth-educated about Bitcoin, the monetary system & investing, they are asked the windfall question again.
Notes:
-95% of people made it all the way through the survey, showing a general level of interest in the topic of investing in Bitcoin when engaged.
-You can see the questions in the below linked twitter thread. (The answers to this Twitter survey were NOT included in the survey results)
The Results.
It’s true, Boomers are less interested in Bitcoin than Gen X, Millennials & Gen Z. Only 4% of Boomers initially answered that they would chose Bitcoin in the Windfall Game.
People who identified as Wealthy presented with statistical significance as being more interested in Bitcoin than other economic classes (both at the start & end of the survey.)
People identifying as being Low Income & Below Poverty Line are drawn towards choosing the safer ‘Cash’ option.
Education showed a significantly positive impact on Bitcoin interest.
What about women?
Is the assumption true that women are less interested in Bitcoin than men?
The results show men are initially more interested in Bitcoin than women.
Women showed a better awareness of what they didn’t know but were more likely to chose US Dollars (low risk.)
Men were more unaware of their lack of financial knowledge & had more interest in investing (higher risk tolerance.)
Women were more likely to overestimate the size of the US National Debt, while men were more likely to underestimate.
Men were also more confident in the strength of the US Dollar than women, who were more aware that the US Dollar has lost purchasing power through the years.
Women more likely to answer that they did not trust banks, or had no opinion vs men who were significantly more trusting of banks.
This pattern repeats through the survey, showing a divergence of answers between men & women.
Was Bitcoin education effective?
Yes. At the beginning of the survey, 13% of the general population answered Bitcoin.
At the end of the survey, 95% of the respondents made it through the survey & 38% chose Bitcoin.
Bitcoin emerged as the number 1 investment choice, significantly higher than US Dollars, Gold & US stocks. Most of the uptick was people who initially chose Cash or Stocks switching to Bitcoin.
Digging into the results.
While Boomers are less interested in Bitcoin than other generations, a large percent of them changed their mind by the end of the survey.
All generations showed a significant lift from the start of the survey to the end, but Boomers increased the most with a delta of 361%. Gen Z also showed remarkable open-mindedness.
Even with this large increase in Boomer interest, Millennials & Gen X are still significantly more likely to invest in Bitcoin.
Boomers & Gen X were also more likely to think that the US Dollar was still backed by gold.
Boomers showed that they are not as likely to drop gold, but they are likely to drop stocks & cash in favor of Bitcoin.
How the rich think about money, investing & Bitcoin vs the poor.
So how did economic status affect the way the survey was answered? There was an interesting theme throughout the survey where the wealthier a person was, the more they thought they knew about investing, even if their answers were wrong.
Not surprisingly, every SES group showed significant increased interest & Wealthy individuals are more likely to invest in Bitcoin both pre & post education at 46%.
Interestingly, Low Income individuals showed the most uptick at +328%.
We started this section with the typical Bitcoin rabbit hole question; “What do you think US Dollars are backed by?”
The wealthy were more likely to think ‘Gold Reserve in Fort Knox’ still backed the US Dollar.
They also got the correct answer, wrong by a statistically significant margin.
Only 22% of people answered “nothing” where 15% answered “Something Else.” Over 60% of people answered that it was backed by Gold Reserves + other assets.
There were no statistical differences between the very rich vs very poor when asked about the US national debt. Curiously though, the Low Income & Middle Class respondents were more likely to know the national debt than the Poverty & Wealthy participants.
Q6: How do you think the US Dollar has performed as a store of value of the last 100 years?
Wealthy people showed significant confidence in the wrong answer, compared to people identifying as in Poverty.
Americans are unaware of the severity of National Debt & Inflation.
Only 9% were aware that the US Dollar lost a majority of its purchasing power over the last 100 years.
A full 91% of respondents, regardless of demographics, thought the US Dollar retained or gained purchasing power since 1920!
Nearly 1/3 of respondents were “shocked” to learn that the US Dollar has lost the majority of its purchasing power in the last 100 years.
When asked about the national debt, a full 1/3 of respondents thought the US National Debt was significantly lower (under $1 Trillion) than it is (currently ~$23T.)
Inflation, Investing in Gold & Stocks compared to Bitcoin
In the Windfall Game, respondents were reminded that a pizza cost $2 in 1970 when the S&P (US stock market) was at $92.
We explained that if you held US stocks for 50 years, you got a 30X return on your money since the S&P is over $3000.
We asked them estimate what the return would be when factoring in how much buying power that money lost over the 50 years, since a pizza now costs $20.
Only 15% of people got the correct answer of 3X.
11% of wealthy people answered “I’m not sure” (the majority of wealthy respondents got the answer wrong), where 31% of lower income classes answered “I’m not sure.”
(NOTE: The answers may have been skewed here because it was more of a math problem than the other questions.)
At this point in the survey, respondents are now aware that investing in stocks over the long term has produced significant returns in dollars, but the US dollar has lost significant buying power.
Then we take them deeper down the rabbit hole and asked how they think Dollars are created.
Notably, 15% of Americans think that either the President or the US Congress is responsible for creating new money.
Respondents were then told that the significant majority of US Dollars are created by the Federal Reserve & Banks, that’s why the bills are called “Federal Reserve Notes.”
When asked what sort of entity the Federal Reserve was, the majority of respondents assumed it was a Federal Government Entity.
Millennials & Wealthy people who knew the Federal Reserve created money didn’t realize it was not a federal government entity.
33% of Gen Z respondents knew the Federal Reserve created money and 22% were aware that it was not a government controlled entity.
Gen X & Boomers were least likely to know the right answer.
When asked a similar question about Bitcoin, the majority of people thought Bitcoin was controlled by a company, a person or a government.
“41% of men answered correctly, while only 28% of women were aware that nobody controls Bitcoin.” — Esther Vlessing, Hotspex
47% of Boomers chose the correct answer. Gen Z was most unaware of Bitcoin’s decentralization properties.
People identifying as Low Income & Wealthy were less likely to know that nobody is in control of Bitcoin than Low Income & Middle Class respondents.
Note: Across all demographics, more people answered the Bitcoin governance question correctly vs the Federal Reserve question.
Statistical significance: 93% of wealthy people answered that they trust banks.
Surprising result: Boomers & Gen Z were the least trusting of banks in this survey.
Gauging Bitcoin Interest Levels.
At this stage in the survey, the respondents had been exposed to new information about the way money is created, the value of the US Dollar over time & the performance of the stock market over 50 years compared the drop in purchasing power of the US Dollar over the same 50 years.
Before being taught more about Bitcoin, interest levels were measured.
When asked if the respondent was knowledgable about Bitcoin, 62% of people indicated an interest in learning more about Bitcoin.
27% of people answered “No & I’m not interested.”
Statistical Significance: 39% of women chose “No & I’m not interested” vs only 15% of men, while 18% of men answered “I’m very knowledgable about Bitcoin & cryptocurrency” vs only 4% of women.
Boomers showed significantly less initial interest in learning more about Bitcoin at 51% “not interested” than the other generations while Gen Z showed significantly more initial interest in learning more about Bitcoin than the other generations at 54%.
People who identified as Wealthy were significantly more likely to report that they are interested in learning more about Bitcoin.
Statistical Significance: Only 4% of wealthy people reported no interest in learning more about Bitcoin.
Even though the lower income class respondents reported less interest in learning more about Bitcoin than wealthy respondents, they still had a significant interest overall.
Bitcoin compared to other assets & money systems.
Question 13 asks “Which asset do you think has been a better investment over the last 10 years than Bitcoin?”
A significant majority of people (88%) were unaware that Bitcoin has performed better than all other asset classes in the last 10 years.
Only 12% got the answer right, and those who chose that answer were mostly made up of people who originally chose “Bitcoin” and the beginning of the survey.
Boomers were significantly more likely to think Gold was a better investment.
Gen Z was significantly more likely to think US Stocks were a better investment.
Overall, there was a general assumption that Gold was a better investment than Cash or Stocks.
Note: When crafting the survey, I didn’t think to explain to the respondents how Gold has performed vs Stocks, but for the curious, you would have to go back to 2005 for Gold to outperform Stocks.
Gold vs Stocks over the last 10 years:
Gold vs Stocks over the last 15 years:
Respondents were then given the information that Bitcoin has been a better investment. They were then asked how much they thought Bitcoin was worth.
The majority of people thought Bitcoin was worth 10–100X what it actually is.
43% of Boomers already thought Bitcoin was twice the size of Gold by market cap.
Only 17% of Boomers realized how small Bitcoin is compared to other asset classes.
When asked if the survey respondent trusts banks, 59% answered yes.
50% of women answered that they didn’t trust banks or had no opinion while 69% of men said they trusted banks.
Bitcoin Confidence Levels Post-Education
At the end of the survey, respondents were asked if they felt that Bitcoin could increase in price 50X to become worth the same amount as the total amount of Gold in the world.
The majority of people thought that it was possible for Bitcoin to increase in price 50X.
Only 6% firmly believed that it could not happen and 9% thought it would be worth more than gold.
37% of women expressed doubt, vs only 24% of men.
63% of men vs 47% of women answered “yes, that’s plausible.”
With statistical significance, people who identified as Wealthy or Below Poverty Line were more likely to think the market cap of Bitcoin could be worth more than gold.
Windfall Game answers when asked again.
At the end of the survey, 38.4% of respondents chose Bitcoin as the answer to the Windfall Game after education.
Most of the increase in Bitcoin came from people who originally chose ‘Stocks’ & ‘US Dollars’ changing their minds.
Significantly more Boomers chose Bitcoin at the end vs the start, but they were still less likely to choose Bitcoin than the other generations.
Statistical significance: Gold showed staying power.
Boomers & Gen X were more likely to choose Gold (35%) than Millennials & Gen X (17%.)
Wealthier people were more likely to choose Bitcoin.
Lower Income people were more likely to choose Gold.
Takeaways & Commentary.
Although at first only 13% of participants would chose Bitcoin in the windfall scenario, 38% chose Bitcoin by the end.
Becoming more informed about the money creation process, the effects of inflation on the value of US Dollars & Bitcoin’s performance as an investment vs Gold & Stocks clearly shows a positive overall effect on the decision to invest in Bitcoin.
There was a 33% overall increase of participants choosing Bitcoin in the windfall scenario at the end of the survey.
“Being Wealthy is largely indicative of desire to invest in Bitcoin, with Gen X and Millennials being most positive about Bitcoins future.”
-Esther Vlessing, Hotspex
We didn’t measure the “a ha” moments in the survey, but one of the most dramatic misconceptions was where 90% of people assumed US Dollars had gained purchasing power over the last 100 years.
When they were told that it had lost 96% of its purchasing power, it was hard for most people to believe. The eventual realization of the truth of the destruction of the dollar’s purchasing power over time is likely one of the most impactful things that shifted opinions towards Gold & Bitcoin.
Big thanks to Esther Vlessing from Hotspex who programmed the survey, & coaxed out some very useful takeaways. She did a podcast episode with me discussing the results of the survey which you can listen to here.
During our podcast episode when we were discussing the results, she shared that before working on this survey, she didn’t know much about Bitcoin, but she expressed personal interest in investing in Bitcoin after working on it.
Esther had a great list of takeaways:
So who’s the easiest demographic to convert to a Bitcoin investor? Esther from Hotspex identified Wealthy individuals as the most interested but also the most unaware of their lack of knowledge.
Women
It turned out that women actually were significantly less interested in Bitcoin initially.
Into the middle of the survey, men were much more likely to report that they are already knowledgeable about Bitcoin (even if they aren’t) and were more interested in learning more about Bitcoin than women were.
However, at the end of the survey, men were only slightly more likely to choose Bitcoin than women, showing a meaningful increase of Bitcoin interest levels among women after education.
From the data, Esther observed:
- Men were more knowledgeable, interested & confident about their knowledge about Bitcoin than women.
- Women expressed more knowledge about the US monetary system.
- Across questions, differences emerged in areas of opinion. Women were more likely to select cautionary answers like “No Opinion”, “I doubt it”, while men were significantly more likely to give confident & positive statements.
I really hope that it’s not necessarily a gender based fact that women are initially less interested in Bitcoin, instead I hope that we just need to do a better job at crafting more relevant messaging that will speak to women & get them more interested in this new phenomenon.
When talking about investing in Bitcoin, the marketing & education that targets women should take into account that they are more conservative when it comes to finances & investing.
I would love to see some more thoughts on this topic … as a man, I don’t have great insight into how to better position Bitcoin for women.
Do we craft messaging that more positively shows how Bitcoin can provide financial independence from a patriarchally dominated fiat system?
Should we focus on education that teaches women how Bitcoin gives more privacy & freedom from potentially repressive governments or controlling parters?
I reached out to some women in the Bitcoin space to get reactions about the gender based results, and they gave me some insightful context;
Women are more likely to be unbanked, undocumented or low-income. It’s not as if men & women of equal wealth & education differ widely in their interest in crypto — it’s that there are less independently wealthy/educated women in charge of investments.
Men also take more risks because they are encouraged to be brave from a younger age.
Just 50 years ago, women couldn’t open bank accounts — now we have women as the CEOs of some of the most prominent companies in the space; Binance US & Lightning Labs!
One thing is for sure, by the end of the survey, the results promisingly showed that many more women were choosing Bitcoin vs the beginning.
Boomers
The fact that boomers were the most receptive to changing their mind about Bitcoin was a surprising result to me. Perhaps the #DropGold campaign being spearheaded by Barry Silbert & Grayscale might not be the right marketing strategy to bring Boomers into the fold.
It’s a very adversarial message which will definitely get people talking, but it will likely turn boomers off from investing in Bitcoin.
Since Boomers showed the most open-mindedness about changing their minds on Bitcoin with a little education, perhaps the adversarial “Drop Gold” messaging targeted at Boomers might be counterproductive to Bitcoin adoption.
Barry Silbert says $68 Trillion is being handed down from Boomers to Gen X/Millennials over the next 25 years, so it’s clear that the #DropGold campaign is targeted towards capturing some of that generational wealth transfer rather than convincing Boomers to buy Bitcoin.
Hopefully this survey provides useful data to Bitcoin companies that Boomers are not a lost cause. With properly tuned marketing & education, Boomers are very open-minded about Bitcoin.
It would be great to see some more efforts towards Boomer education, as they are a significant portion of the wealthy socioeconomic class.
Next Steps.
As a Bitcoin investor & evangelist who’s been spreading the good word of Satoshi since 2011, I’m very interested in understanding the way the masses perceive Bitcoin.
While I’m very confident in Bitcoin’s long term value, I often wonder if Bitcoin will succeed at becoming an apolitical reserve asset similar to Gold, a reserve currency of the world similar to US Dollars, or even the Internet’s native unit of account.
America is not enough. We need to run the Windfall Game internationally to compare how people in Africa, China, India, Russia, etc think about Bitcoin, money & investing vs Americans.
In follow-up studies, it would be good to understand which information was most effective in changing participants’ minds.
Curiously, there was a small percent of people who originally selected Bitcoin but then changed their mind to Stocks or Gold at the end, it would be worth examining why.
We should identify the barriers of those deciding not to chose Bitcoin (62% of the participants) to identify actionable ways to craft more relevant messaging and more effective education.
I also give permission for anyone to run the Windfall Game survey themselves to get more data. I’m personally interested in getting data from Pakistan, Mexico, Japan & Europe (Germany/UK).
If you want to learn more about me, I’m @bradmillscan on Twitter or subscribe to my podcast, Magic Internet Money.
For more survey data on how people think about Bitcoin, check out “Bitcoin Is A Demographic Mega-Trend” by Spencer Bogart of Blockchain Capital.
