Fed survey reveals crypto ownership remains flat despite recent market growth
Recent data from the Federal Reserve’s Consumer Finance Institute (CFI) reveals a puzzling trend: despite a significant recovery in the cryptocurrency market, ownership rates among survey participants have not increased accordingly. This analysis challenges the expectation that market gains would translate into higher ownership levels.
The CFI’s report highlights a disconnect between cryptocurrency market growth and actual ownership. According to the data, while the cryptocurrency market has surged by about 150% since early 2023, the proportion of people holding cryptocurrency has not followed suit.
In the time between January 2022 and July 2024, the CFI succeeded in monitoring the ownership of the cryptocurrency using the Bitcoin prices as a kind of the benchmark. In the winter of 2022, more than three-quarters of the respondents who had cryptocurrency reported a decline in their holdings from 24.6% in January to 19.1 % by October. The bearish momentum continued despite the market’s subsequent recovery. At the same time, a drop to 17.1% was noticed by October 2023. However, this percentage had further been reduced to 15.4% by January 2024.
The slowdown in Bitcoin ownership was also seen in the report indicating figures dropped from April 2023’s 16.1% to 14.7% by July 2023. Ironically, despite the highest price of Bitcoin being slumped in March and a forecasted ultimate rise in ownership because of the halving event in April, it did not happen.
But the CFI noticed a significant change in the inclination to buy in the future. Purchasing cryptocurrencies became highly popular as the market recovered. By April 2024, 21.8% of respondents said they planned to purchase cryptocurrencies, up from 10.6% during the 2022 recession. This implies that future interest in cryptocurrencies is growing, despite the fact that present ownership rates are flat.
Two different web-based surveys totaling five thousand nationally representative responses served as the basis for the Fed’s study. The results are in stark contrast to other predictions, such as Coinbase’s forecast of 52 million Americans using cryptocurrencies by September 2023—a figure much greater than the 18 million Americans the Federal Reserve estimated would be using them in 2023.
In summary, while the cryptocurrency market has rebounded impressively, actual ownership levels have remained stagnant. The increase in future purchasing intent could signal potential growth, but the current ownership figures indicate a disconnect between market performance and individual investment decisions.