The past few months have been one helluva of a time for those of us in the cryptospace. The major thing which I believe has kept us going is trust and optimism in Bitcoin. Today, I stumbled upon a report by Morning Consult on
The Crypto Report: Our Analysts on the State of Cryptocurrency. Below are some of the key findings
1. Cryptocurrency is mainstream
A wide array of U.S. consumers have avidly adopted cryptocurrency over the last few years, but most of these crypto owners still view it as an asset in their portfolio rather than a form of payment
2. Men, millennials and high-income households continue to drive cryptocurrency adoption
As of May 2022, 17% of U.S. adults said they or someone in their household owns cryptocurrency. Cryptocurrency ownership surged in July and December 2021, most likely due to a drop in the price of bitcoin — the most popular cryptocurrency — and surrounding media coverage as consumers “bought the dip.” But demographically, the new crypto owners looked very similar to those who already owned crypto: They were mostly high-earners, millennials and men.
3. Crypto owners come from all walks of life and are disproportionately ethnically diverse
Cryptocurrency owners are also a more ethnically diverse group than the general population.
4. Bitcoin is the most popular cryptocurrency among U.S. adults
By a wide margin, bitcoin is the most popular cryptocurrency owned by U.S. adults — which is why it is often considered synonymous with the term “cryptocurrency” itself, and why fluctuations in its price cause broader market impacts. Threequarters of cryptocurrency owners say they have some bitcoin as of mid-June 2022.
5. Crypto owners aren’t shunning traditional financial services — they’re power users
But in fact, consumers who own crypto report using more financial services providers than the general population. Far from shunning traditional finance, crypto owners seem to embrace it.
6. Crypto owners use alternative financial services more than the general population
Cryptocurrency owners are seeking out better ways to pay, although that is not necessarily why they own cryptocurrency
7. Owners view crypto as an asset and are in it for the money
A majority of crypto owners (66%) primarily see cryptocurrency as a way to make money rather than send it — although it should be noted that over a third of them occasionally use their cryptocurrency as a means of payment.
8. Crypto purchase intention remains strong despite declining trust and challenging economic conditions
This purchase intention is likely driven by an opportunistic desire among consumers to “buy the dip” as prices of cryptocurrencies have fallen — especially in June, when many institutional investors were forced to liquidate their leveraged positions.
9. Beyond Bitcoin, crypto owners are an optimistic group
Consumer sentiment in the United States is plummeting, but cryptocurrency owners remain relatively optimistic, despite significant price volatility in bitcoin and other digital assets in recent months. However, market turmoil is leading more Americans to say that cryptocurrencies should be more heavily regulated.
10. Consumer sentiment is considerably higher among crypto owners
Over the course of 2022, Morning Consult’s Index of Consumer Sentiment has hit a new series low, dropping 13.5% since mid-January. Confidence among cryptocurrency owners, however, has held up relatively better and is down only 8.1% over the same period. The ICS among cryptocurrency owners is currently 15 points percentage points higher than among all U.S. adults.
11. Crypto owners are the most optimistic about their future personal finances
Cryptocurrency owners are more optimistic than the average U.S. consumer across all five components that make up Morning Consult’s Index of Consumer Sentiment. Morning Consult data shows that cryptocurrency owners tend to have loftier price expectations that, if they came to fruition, would likely benefit owners’ personal finances.
12. Bitcoin prices falling away from owners’ expectations
Cryptocurrency owners’ optimism may well prove to be misplaced as we enter what the CEO of Coinbase recently described as a “crypto winter.”
13. A rising share of Americans favor heavier regulations on cryptocurrency
A market selloff, especially among so-called stablecoins, has brought calls for a bailout and prompted some policymakers to speak to the need for increased regulation of the cryptocurrency space.
14. Adoption drivers differ globally
Capital controls and extreme inflation are associated with higher levels of cryptocurrency use at the country level, but overall, gold and fiat money are still the preferred stores of value around the world. Global citizens disagree on whether governments should issue central bank digital currencies, with wealthier countries tending to be more skeptical.
15. Seven of the top 10 adopter countries have some form of capital controls
Nigeria leads in cryptocurrency activity, with 55% of adults in the country saying they buy or sell crypto at least once a month. On the other end of the spectrum are Japan and China at 7% and 8%, respectively. (China banned cryptocurrency trading in September 2021.) The United States falls within the bottom half of countries surveyed. Only 16% of U.S. adults say they buy or sell cryptocurrency at least monthly. Most of Western Europe and North America also fall below the median for cryptocurrency usage. In countries where we see the highest level of cryptocurrency use among the general population, we can point to some similarities: They tend to be lower-income, and seven of the top 10 have some form of foreign exchange or capital controls. Some countries, such as Turkey and Argentina, have experienced extremely high inflation in recent months, which may also be encouraging the retail use of cryptocurrency.
16. Cryptocurrency use is only weakly correlated with inflation rates
The most recent annualized inflation rate data from official sources — April or May, depending on the country — and the share of people saying they have bought or sold crypto in the last month show a positive correlation. However, outliers experiencing extremely high inflation, such as Argentina and Turkey, disproportionately drive this relationship. If we remove those countries, the correlation drops from .5 to .21, a weak relationship.
17. Gold and fiat money are still the preferred stores of value
More than any other financial instrument, gold was the top choice as a store of value, with majorities of adults in every market saying they trusted it as a way to keep wealth they would need access to within a year or two. After gold, local currency was favored in most places,
though Colombians and Argentines preferred the U.S. dollar. In light of sanctions imposed after Russia’s invasion of Ukraine, Russians have the least faith in the U.S. dollar compared with all other options for storing wealth.
18. The top reason for interest in crypto varies by country
In China, the United States and Russia, the top ”major reason” men gave for their interest in cryptocurrency is “I believe it’smore private”. Globally, investment is the driving reason for cryptocurrency adoption
19. Will central bank digital currencies pose a challenge to crypto?
Even as over 90 governments pilot or scope issuing a central bank digital currency, we’re a long way from a global consensus that countries should issue their own CBDCs. Adults in several European and Asia-Pacific countries are unsure or skeptical, while Latin Americans are generally more positive.
Pretty interesting isn't it? What do you think about this report? What part do you agree or disagree with?