New Research From JPMorgan Chase:
The JPMorgan report is based on an analysis of cash transfers made by more than 5 million consumers from their banks to cryptocurrency accounts.
According to recent data by JPMorgan Chase, 43 million Americans, or 13% of the country’s total population, have owned cryptocurrencies at some point in their lives.
This number had increased significantly from before 2020, when it was only 3%, according to a paper published on December 13 titled “The Dynamics and Demographics of U.S.U.S. Household Crypto-Asset Use.”
The most recent information from JPMorgan was obtained by studying checking account movements from a sample of more than 5 million users. It was discovered that around 2020 to 2022, 600,000 customers in this sample group transferred money to cryptocurrency accounts.
The survey also found that bitcoin owners generally bought their initial coins during price peaks. During this period, more money is often deposited into cryptocurrency exchange accounts than is taken out. In other words, the majority of people throughout this time were holding onto their cryptocurrency.
As cryptocurrency prices dropped in early 2022, this changed, according to JPMorgan. Cash transfers into cryptocurrency exchanges have barely surpassed cash transfers out of them in recent months.
According to JPMorgan, the drop in the savings rate in the U.S.U.S. since the epidemic and price declines in cryptocurrencies are both to blame for this:
The rise and decline in cryptocurrency use after the implementation of COVID is in line with the mutual relationship between retail flows and market prices discovered in other studies. The dynamics of household savings, which peaked at historic highs early in the pandemic but are now starting to decline, are likewise tracked by the trend in cryptocurrency flows.
Who Is Buying?
The survey addressed whether specific demographic groups are more likely to purchase cryptocurrency. It was discovered that men, regardless of age, buy substantially more cryptocurrency than women, and younger people buy far more than older people. For instance, the study discovered that more than 25% of millennial men, just about 12% of millennial women, and 5% of male baby boomers had purchased cryptocurrency.
A breakdown of demographics for cryptocurrency ownership. The JP Morgan Chase Company
The study also discovered that most people’s crypto holdings were quite little, with median flows equal to less than one week’s worth of take-home pay.
On the other side, 15% or so of cryptocurrency owners have more than one month’s salary invested in the currency.
In 2022, there was a sharp decline in the value of cryptocurrencies. Bitcoin dropped from a March high of $47,459 to $17,208 at the time of writing, while Ether dropped from $3,521 to $1,273 simultaneously.
The TerraUSD (U.S.T.) stablecoin losing its peg in May, and the bankruptcy of the cryptocurrency exchange F.T.X. in November were two market shocks that contributed to the current decline in the cryptocurrency market.
Many cryptocurrency exchanges have reduced their trading costs, and Coinbase has reported a roughly 50% decline in revenue.
However, this new analysis shows that crypto ownership has surged over the past few years even though crypto prices and trade activity have decreased.