Big Crypto Poll Part 2: Wealth 🗳️✅
Lifestyles of the Rich and Anonymous
Latest in our series:
Funny enough, we had planned to publish this article yesterday, but our timeline was so distraught over the bloody aftermath of the Trade Wars it felt tonally inappropriate to boast about the opulence of the crypto community.
Instead, we put it on ice for 24 hours, which was probably tactful. Part 2 of our series unpacks the net worth of crypto users. And crypto users are decidedly wealthy, events of the past weekend notwithstanding.
TL/DR:
Crypto users median annual salary of $110K, almost twice the US average
Median ~$200K onchain net worth, spread among many wallets
Most crypto users are employed, except possibly among whales
Wealth
Our survey had three questions which gave us insight into readers’ net worths. Two were explicit:
What is your estimated onchain net worth?
If you're employed, what's your estimated annual household income?
The third was indirect…
In other words, we had users drop a wallet, hinting at an airdrop. To everybody’s surprise, we actually delivered!
Enough people filled out the third question that we went ahead and scraped their wallet net worth via the DeBank API, because web3 is transparent like that.
The great news is that the values all matched up! Had it been, say, a blind date, then perhaps there would have been more fibbing about their net worth. Fortunately the correlation among actual wealth and self-reported wealth was very high… by far the highest correlation among any variables in the entire survey.
Later in the article we’ll present our analysis of why we suspect the data happen to be credible. For starters, let’s just look at what the raw data reveals about the relative wealth of crypto users based on their replies to these questions.
Onchain Net Worth
The median crypto user has an onchain net worth in the $100K to $1MM range. About 95% of crypto users fall within the range of $1K to $10MM.
Across the logarithmic scale of bins on the y-axis, this looks to fit a normal curve. Fitting this to a log-normal fit, we estimate the median value is a ~$200K onchain net worth, but this median could fall anywhere within this six-figure range.
Globally, wealth is distributed across a Pareto distribution. Instead of a bell shape, the global net worth distribution is heavily concentrated around zero, with an extreme long tail of billionaires. The fact we see normal distribution instead of a Pareto distribution suggests to us that below a certain threshold of wealth, people simply do not bother going onchain. An alternate explanation is that the global poor are not interested enough in DeFi as to have found their way into our survey.
All the same, the remainder of our analysis will use these bins as net worth clusters for the remainder of this study. We’ll refer to the 10% of users who report an onchain net worth over $1MM to be “whales.” The remainder will use $100K onchain net worth as the cutoff to cluster respondents into two roughly equally sized buckets.
Q: Why did you get into crypto?
A: To make money/invest. but now it’s more of a hobby/pastime
35 year old American whale, 10-30x tx/day
Income
Are crypto users really unemployed traders living in their parent’s basements? It turns out, the overwhelming majority report they have jobs! Our second question related to wealth asked users to report their income “if employed,” and the supermajority offered a number.
When asking this questions, we weren’t sure whether we’d see much correlation between income and onchain net worth. It is quite possible users might have a high income, but never bridge it onchain. Or users might have become Bitcoin billionaires who never need to work a day afterwards. As it turns out, we saw a 77% correlation between reported income and onchain net worth, an extremely strong overlap.
Now that you’re accustomed to viewing dropoff charts from the prior article in the series, you’ll be familiar with use of this format to display self-reported income. The red line represents US Income deciles for the sake of comparison.
Relative to the US average, survey respondents representing the crypto community sees a similar shape, but displays a markedly greater income. The median US income is around $50K-$80K depending on the source, versus about $110K for our respondents.
Compared against the “median,” the value of the “mean” income is skewed incalculably higher. One respondent broke this scale by claiming an annual income of “$5M+.” We were skeptical, but the wallet they furnished in fact corroborated this boast.
You might observe the dropoff chart above never actually drops to zero. Unfortunately for the giga-whale’s ego, his income looks like slightly less of a flex on a log scale…
Although our multimillionaire might push up the mean income, you might note the curve was not wrecked simply due to this one particular whale. A long tail of wealthy users exist in crypto. A fifth of respondents reported $200K annual income. The top ten percent reported annual incomes over $400K.
The crypto community disproportionately consists of people who successfully struck it rich through their own talent and are in the process of bringing their wealth onchain.
Above we mentioned a 77% correlation between income and net worth. Here’s how this breaks down among whales and other net worth buckets.
A hearty thank you to the whale class for continuing to push up the stats of our readership! We’re also thrilled to see 95% of you can afford to keep reading…