A recent study from the U.S. Federal Reserve reveals that despite a strong market rebound, cryptocurrency ownership among U.S. consumers has not increased. The study, conducted by the Federal Reserve Bank of Philadelphia’s Consumer Finance Institute (CFI), analyzed data from surveys conducted between January 2022 and July 2024, using Bitcoin prices as a reference to examine ownership trends. The findings show that cryptocurrency ownership declined during the 2022 “crypto winter,” with ownership rates dropping from 24.6% in January 2022 to just 15.4% in January 2024, despite the market’s recovery over the following 18 months.
Even with Bitcoin’s surge in price in March 2024 and its halving in April, ownership rates continued to decline, reaching 14.7% by July. The report notes that while ownership numbers remain stagnant, there has been an increase in the number of people considering purchasing cryptocurrencies in the future. Interest in future crypto investments plummeted during the 2022 bear market but has since surged, with 21.8% of respondents expressing a likelihood of buying crypto by April 2024, up from a low of 10.6% during the downturn. The CFI’s research is based on responses from over 5,000 participants.
The Federal Reserve’s annual household survey, known as the Survey of Household Economics and Decisionmaking (SHED), found that the number of U.S. adults reporting cryptocurrency ownership or usage has significantly declined. In the 12-month period leading up to October 2023, 7% of surveyed adults reported using cryptocurrencies, down from 10% in 2022 and 12% in 2021. This contrasts with Coinbase’s claim that 52 million Americans own cryptocurrencies. Additionally, the survey revealed that nearly 40% of institutional investors had exposure to crypto assets in 2023, compared to 31% in 2021. A third of respondents reported having at least 10% of their portfolio allocated to crypto assets, reflecting a growing interest among institutional investors.
Furthermore, a recent survey conducted by KPMG explored the reasons behind institutional investors’ growing interest in cryptocurrencies. The survey found that 67% of respondents cited the maturing market and custody infrastructure as significant factors, marking a substantial increase from the 14% recorded in 2021. Institutional interest in crypto assets has been on the rise, with more investors allocating a larger portion of their portfolios to this asset class. Despite the stagnant ownership rates among retail investors, institutional investors are increasingly recognizing the potential of cryptocurrencies and diversifying their portfolios accordingly.
The Federal Reserve’s report indicates that despite the market’s rebound, cryptocurrency ownership among U.S. consumers has not seen a corresponding increase. The decline in ownership rates during the 2022 “crypto winter” persisted even as the market recovered, with ownership rates dropping to 14.7% by July 2024. However, there has been a surge in interest among consumers considering purchasing cryptocurrencies in the future, with 21.8% of respondents expressing a likelihood of buying crypto by April 2024. This contrasts with the decline in ownership reported in the survey of U.S. adults conducted by the Federal Reserve, which showed a decrease in cryptocurrency usage among surveyed adults from 12% in 2021 to 7% in 2023.
Institutional investors, on the other hand, are increasingly recognizing the potential of cryptocurrencies and diversifying their portfolios to include digital assets. Nearly 40% of institutional investors had exposure to crypto assets in 2023, marking a significant increase from the previous years. Reasons cited for this growing interest include the maturing market and custody infrastructure, as well as the potential for diversification and growth offered by cryptocurrencies. Despite the stagnant ownership rates among retail investors, institutional interest in crypto assets continues to grow, reflecting wider recognition of the value and potential of digital currencies in investment portfolios.
