The Federal Reserve report reveals some interesting trends regarding cryptocurrency holders, however, this report should be qualified.
The United States Federal Reserve is often very critical of cryptocurrencies, but today a new report acknowledges their growing popularity among nonbank Americans. The Central Bank has published a report on the economic situation of American households in 2021, and while inflation has had a big impact this year, there are several trends emerging for digital assets.
Federal Reserve Report Reveals Some Interesting Trends About Cryptocurrency Owners
Cryptocurrency is still used primarily as an investment, but those who use digital assets for transactions are most often people who do not have bank accounts or credit cards. This suggests that digital assets are reaching a goal that traditional financial institutions cannot help, and that it may be important for the Federal Reserve to be aware of this.
According to the figures in this report, 12% of American adults owned or used cryptocurrencies, but when researchers examined their reasons for owning digital assets, several inconsistencies emerged. People who buy crypto as an investment — 11% of adults — “have disproportionately high incomes, almost always have relationships with a traditional bank, and usually have other retirement savings.” 46% of crypto investors earn more than $100,000, 99% of them have a bank account, and 89% have “at least one” retirement savings plan.
On the other hand, the financial profile of Americans who use cryptocurrencies for transactions, everyday purchases, is very different: “nearly 6 out of 10 adults who used cryptocurrencies for transactions have an income of less than $50,000. Only 24% have an income of more than $100,000.” For the Fed, this is partly because there are more and more alternative financial services in the US.
Report to be qualified
However, this report must be qualified. The cost of living has risen significantly in recent months. In the past year, 78% of adults were “financially successful or comfortable.” This figure was the highest since the first such study was conducted in 2013. The US CPI also rose 8.3% year-over-year in April, pushing up the prices of goods and everyday services.
It should also be noted that the 2021 survey was conducted from October 29 to November 21, when many cryptocurrencies, including Bitcoin, were at their peak. Since then, attitudes towards cryptography could change dramatically.
While the report clarifies that cryptocurrencies are currently not commonly used as a payment method, some entrepreneurs are looking to change that. Strike CEO Jack Mullers announced his intention to bypass credit card processing companies. At the Bitcoin 2022 conference in Miami, he stated that many companies have not updated their infrastructure for several decades. The CEO wants Bitcoin to be used as a payment method at tens of thousands of checkout counters across the United States. Similarly, the well-established brands Visa, Mastercard, and PayPal have been exploring digital assets for several years now.