About 13% of the US population – or 43 million people – have held cryptocurrency at some point in their lives, new research from JPMorgan Chase has revealed.
According to a December 13 report titled: “The Dynamics and Demographics of US Household Crypto-Asset Use” this number has increased dramatically since before 2020, when the figure was only around 3%.
JPMorgan’s latest data comes from analyzing checking account transfers from a sample of more than 5 million customers. It found that 600,000 customers in this sample group transferred cash to crypto accounts at some point during the 2020-2022 time period.
The study also notes that cryptocurrency holders typically make their first cryptocurrency purchases during cryptocurrency price spikes. During this time, the amount of cash sent to cryptocurrency exchange accounts often far exceeds the amount of cash withdrawn. In other words, most people were holding on to their crypto during this time period.
This changed in early 2022 when cryptocurrency prices fell, according to JPMorgan. In recent months, cash transfers to crypto exchanges have only slightly exceeded cash transfers out of them.
JPMorgan says this is the result of both price declines in crypto and a broader trend of the savings rate declining in the United States since the pandemic:
“We believe that the rise and fall of crypto usage since the onset of COVID are consistent with the joint relationship between retail flows and market prices observed in previous research. Furthermore, the trend of cryptocurrency flows also follows the dynamics of household savings, which reached all-time highs at the beginning of the pandemic but has begun to reverse”.
Who buys?
The report also looks at whether certain demographic groups are more likely to buy cryptocurrency. Men of all ages were found to buy significantly more crypto than women, with younger men buying significantly more than older ones. For example, the report revealed that more than 25% of millennial men have bought cryptocurrency, while only about 12% of millennial women and 5% of baby generation men boomers have done it.
The research also found that crypto holdings were relatively small for most individuals, with average transfers equivalent to less than a week of “net salary”.
Secondly, about 15% of cryptocurrency owners had more than a month’s salary invested in cryptocurrency.
The cryptocurrency market has suffered a dramatic crash in 2022. Bitcoin (BTC) has fallen from a 2022 high of $47,459 in March to $17,208 at press time, while Ether (ETH) has fallen from $3,521 in April to $1,273.
This drop in the cryptocurrency market has been the result of market shocks such as the loss of the peg of the TerraUSD (UST) stablecoin in May and the bankruptcy of cryptocurrency exchange FTX in November.
Trading fees have fallen on many cryptocurrency exchanges, and Coinbase has gone so far as to claim that its revenue has fallen by almost 50%.
But despite this decline in cryptocurrency prices and trading activity, this new report indicates that cryptocurrency ownership has increased over the course of the last few years.
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