Fed Survey Estimates 18 Million Americans Owned or Used Cryptocurrency Last Year
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On May 21, the Federal Reserve released its latest annual survey of 11,400 households, revealing that the number of U.S. adults reporting cryptocurrency ownership or usage dropped to approximately 18 million last year. This marks a major shift in the crypto industry, highlighting changing trends in digital asset engagement among American adults.
Fed Survey Reveals 7% of Adults Held or Used Crypto in 2023
According to the Fed survey titled “Economic Well-Being of U.S. Households in 2023,” the use of cryptocurrency continued to decline last year. Only 7% of adults reported holding or using cryptocurrency in 2023, which is a decrease of 3% from 2022 and 5% points from 2021.
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— Federal Reserve (@federalreserve) May 21, 2024
Buying or holding cryptocurrency as an investment remained more common than using it for financial transactions. The survey revealed that 7% of adults bought or held cryptocurrency as an investment in the previous 12 months.
In contrast, only 2% of adults used cryptocurrency to make financial transactions, including 1% who used it to buy something or make a payment and another 1% who used it to send money to friends or family.
Although only a small share of adults used cryptocurrency to send money to friends or family, the Fed survey found that over the past two years, one-fourth of these users made at least one international transfer.
This indicates a major use case for cryptocurrency in cross-border transactions, where traditional financial services may be slower or more expensive.
Cryptocurrency use declined noticeably in the U.S. last year, according to the Fed's annual survey of 11,400 households. Just 7% of respondents reported touching crypto – and only 1% actually used it to buy something.
Don't tell Congress that! pic.twitter.com/M24bc0kgyL
— Paul Kiernan (@pkwsj) May 21, 2024
The Fed survey also explored the reasons behind using cryptocurrency for financial transactions. Nearly 3 in 10 respondents cited the recipient’s preference for cryptocurrency as their primary reason, followed by the ability to send money faster and privacy concerns.
A little percentage of users chose safety or lack of trust in banks as the reason for using crypto for financial transactions.
This data highlights that while the overall use of cryptocurrency is declining, specific use cases such as international money transfers and transactions based on recipient preferences continue to drive its adoption.
Fed Survey Data Shows Demographics for Crypto Use in U.S
The Fed survey also revealed the use of crypto in the U.S, which cut across different demographic and socioeconomic groups. But, it was more prevalent among younger to middle-aged adults and men, who used it for investment and transactions.
However, when considering income, race, and ethnicity, the patterns of cryptocurrency use differed based on whether it was used for investment or transactions.
Individuals with an income of $100,000 or more were more inclined to hold cryptocurrency as an investment, whereas those earning less than $25,000 were more likely to use it for financial transactions.
Among different racial and ethnic groups, Asian adults were most likely to hold cryptocurrency as an investment, whereas Black and Hispanic adults were more likely than White adults to use cryptocurrency for transactions.
Furthermore, the use of cryptocurrency for financial transactions was more prevalent among the unbanked and those who used nonbank check cashing and money orders. For example, 4% of unbanked adults used cryptocurrency for transactions, compared to 2% among banked adult
Additionally, those who used neobank check cashing or money orders were more likely to use cryptocurrency for transactions, with 5% usage among this group compared to 1% among t% who did not use these services.
The data from the Fed survey is coming at a time when experts are calling for more interest in crypto. Recall that Robert Kiyosaki had advocated for increased investment in Bitcoin, a bullish sentiment around using crypto assets.
