Fed Survey Shows No Rise in Crypto Ownership Despite Market Growth

Jimmy Aki
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A recent United States Federal Reserve research revealed that crypto ownership has not kept pace with the market’s recent resurgence. The findings were based on two web-based surveys targeting 5,000 nationally representative respondents.

Crypto Ownership Dropped to 19.1% in 2022 Crypto Winter

On September 6, the Federal Reserve Bank of Philadelphia’s Consumer Finance Institute (CFI) released an in-depth report that points out that crypto ownership notably decreased during the 2022 crypto winter. Ownership rates plummeted from 24.6% of the polled population in January 2022 to 19.1% by October 2022.

Despite the crypto market’s gradual recovery over the subsequent 18 months, ownership rates did not follow the same upward trajectory, dropping to 17.1% in October 2023 and 15.4% by January 2024.

The CFI collected data on cryptocurrency ownership through web-based surveys conducted from January 2022 to July 2024. Bitcoin’s price was used as a proxy to reflect the market’s overall performance during this period.

The survey revealed that ownership did not increase, even with Bitcoin’s price peaking in March 2023 and the highly anticipated halving event in April 2024. Instead, ownership rates stagnated at 16.1% in April before declining to 14.7% by July 2024.

Despite the market’s rebound, this steady decline in crypto ownership raises important questions about consumer confidence in cryptocurrency as a “long-term investment or asset.”

The CFI’s report suggests that while prices may recover, factors such as market volatility, regulatory concerns, and the lingering effects of the 2022 bear market may have dampened enthusiasm for crypto investment.

Additionally, the report indicates that the general public might still view cryptocurrency as a risky or speculative asset, which could explain why many individuals have refrained from re-entering the market.

As part of the conversation about crypto investment, recall that ‘Rich Dad, Poor Dad’ author Robert Kiyosaki had urged investment in Bitcoin in May, earlier predicting that the BTC price would rally to the $100,000 mark by September 2024.

Price Increases in 2024 Spark Growing Interest in Future Crypto Purchases

The CFI report also detailed that rising cryptocurrency prices in 2024 have led to an increase in the percentage of respondents likely to buy crypto in the future. Specifically, interest in potential crypto investments among surveyed individuals rose, with 21.8% expressing a likelihood to purchase crypto by April 2024.

This shift contrasts sharply with the decline observed during the 2022 crypto winter when interest in future crypto purchases plummeted from 18.8% to 10.6%. The market’s recovery has ignited interest, signaling a potential rebound in consumer confidence and investment in digital assets.

However, this data is part of a broader trend that has been monitored for some time.

The Federal Reserve’s annual Survey of Household Economics and Decision-making (SHED), released on May 21, 2024, reported a decreased ownership in the United States. The survey found approximately 18 million U.S. adults engaged with crypto in 2023, a drop from previous years.

Notably, the percentage of adults using crypto fell to 7% by October 2023, down from 10% in 2022 and 12% in 2021.

Moreover, the survey revealed that only 1% of adults used crypto for payments or transfers, a 50% decrease from the previous year. In contrast, 7% purchased or held crypto as an investment, thus highlighting a continued decline in active usage, even as interest in future purchases grows.

The CFI’s report suggests that while current crypto ownership rates are low, renewed interest in future crypto purchases could revive the market.

About Jimmy Aki PRO INVESTOR

Based in the UK, Jimmy is an economic researcher with outstanding hands-on and heads-on experience in Macroeconomic finance analysis, forecasting and planning. He has honed his skills having worked cross-continental as a finance analyst, which gives him inter-cultural experience. He currently has a strong passion for regulation and macroeconomic trends as it allows him peek under the global bonnet to see how the world works.