Digital assets can spark philanthropy, says Fidelity Charitable

Investing in cryptocurrency and giving to charity can go hand in hand, according to a Fidelity Charitable study released Thursday.

Owners of cryptocurrencies, like bitcoin or ethereum, are a disproportionately more charitable group, according to Fidelity Charitable’s study, “Cryptocurrency and Philanthropy.” Forty-five percent of cryptocurrency investors donated $ 1,000 or more to charity in 2020, compared to 33% of all investors.

Fidelity Charitable said the reasons could be that millennials, who are more comfortable investing in cryptocurrencies, are also more inclined to donate money to charity than other generations, although some say the donation process is cumbersome.

“The popularity of cryptocurrency among millennials makes it increasingly likely that this trend is here to stay. Millennials are more familiar with cryptocurrency and are more likely to have invested than older generations, and they are much more confident in the long-term prospects of digital assets, ”the study says.

Almost half of millennials in the study (48%) said they knew about cryptocurrency, while only 18% of total investors were, and 35% of millennials said they currently own a cryptocurrency, while only 13% of investors overall did. Among millennials who don’t own cryptocurrency, half said they would likely consider investing in digital assets in the next year or so.

The study included 1,216 investors in the United States who had a minimum of $ 25,000 in assets to invest outside of a workplace pension plan.

“As the value of cryptocurrency increases, there is a growing trend to use it as an asset to be donated to charity,” said Tony Oommen, vice president of charity planning at Fidelity Charitable, in an interview on Wednesday. Oommen works with advisors on charitable giving, tax strategies and other matters. Cryptocurrency donations to charities have quintupled at Fidelity since the start of the year, he said.

“There is a greater awareness that this is something that can be done, and it increases the amount that can be given without costing the donor more,” he said. The donor does not have to pay capital gains tax on the non-monetary assets that are donated to charities, freeing up more money for the charity.

“Money is the most expensive thing donors can give to charity,” Oommen said.

According to the survey, nearly half of millennials said they think cryptocurrency is a smart investment, while only 6% of baby boomers have. In addition to their disproportionate interest in cryptocurrency, millennials are also a charity-prone generation. Almost 90% of millennials said charitable giving is a big part of their lives, while only 74% of total investors have.

To read more stories, click here

Source link