Recent research from the Federal Reserve sheds light on a surprising disconnect between the recent resurgence of the cryptocurrency market and the rate of cryptocurrency ownership. Despite the crypto market’s significant rebound, ownership rates have not followed suit, according to a report from the Federal Reserve Bank of Philadelphia’s Consumer Finance Institute (CFI) released on September 6.
The CFI’s analysis is based on surveys conducted from January 2022 to July 2024. During this period, the price of Bitcoin was used as a key indicator to assess market conditions, particularly noting the depths of the crypto winter that affected the market in late 2022.
- Ownership Decline During Crypto Winter: The CFI report reveals a noticeable decrease in cryptocurrency ownership during the 2022 bear market. Specifically, ownership rates fell from 24.6% in January 2022 to 19.1% by October 2022.
- Stagnant Ownership Rates: Despite the market’s recovery over the following 18 months, ownership rates remained stagnant. By October 2023, only 17.1% of surveyed individuals owned crypto, and this number dropped further to 15.4% in January 2024.
- No Boost from Market Peaks: The report notes that Bitcoin’s price peak in March 2024 and subsequent April halving did not lead to a significant increase in ownership rates. In April 2024, ownership was at 16.1%, and it decreased to 14.7% by July 2024.
Interestingly, while current ownership rates have not shown significant growth, there has been an observable shift in future purchase intentions. The Fed researchers noted that recent price increases appear to have sparked greater interest in future crypto investments:
- Decreased Interest During Crypto Winter: During the 2022 crypto winter, interest in future crypto purchases dropped from 18.8% to 10.6% of respondents.
- Recovery and Increased Interest: As the market recovered, interest in future purchases surged. By April 2024, 21.8% of respondents expressed a likelihood of purchasing crypto, reflecting a renewed enthusiasm for cryptocurrency investments.
Survey Methodology
The CFI’s findings are based on two web-based surveys targeting a nationally representative sample of 5,000 respondents. These surveys provide a comprehensive view of the shifts in cryptocurrency ownership and investment intentions across a broad demographic.
The Federal Reserve’s survey contrasts with other recent findings in the crypto space. In May, the Fed reported that approximately 18 million Americans were involved in cryptocurrency ownership or usage in 2023. This figure is notably lower than Coinbase’s September 2023 report, which estimated that 52 million Americans owned crypto.
| Time Period | Ownership Rate (%) |
|---|---|
| January 2022 | 24.6 |
| October 2022 | 19.1 |
| October 2023 | 17.1 |
| January 2024 | 15.4 |
| April 2024 | 16.1 |
| July 2024 | 14.7 |
The data highlights a disconnect between the cryptocurrency market’s recovery and the growth of crypto ownership. While market conditions have improved, the percentage of individuals who own cryptocurrency has not increased proportionately. However, there is a notable rise in interest for future purchases, suggesting that while current ownership remains flat, future engagement with cryptocurrencies could increase as market conditions evolve.
Featured image credit: Freepik
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