Cryptocurrency’s Quiet Gains: Ownership Increases Despite the Price Drop
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Despite declining prices over the last 18 months, a new study shows that more people are investing in cryptocurrency than ever before.
According to a survey sponsored by University of Chicago finance professor Michael Weber, 12% of investors owned cryptocurrency in December 2022, up from 2% in 2018. According to the Pew Research Center, 17% of respondents had invested in, traded in, or used a cryptocurrency, with 16% entering the crypto realm in the last year when values dropped drastically.
Despite recent bad headlines, research reveals that people continue to put more money into cryptocurrency than they withdraw. Young guys are particularly fond of the asset class. 38% of men aged 20 to 40 hold cryptocurrency, whereas 16% of women in the same age range do.
The primary reasons for buying cryptocurrency are the expected increase in value and portfolio diversification. Do You Even Understand Crypto, Bro? Household Finance and Cryptocurrencies
Furthermore, the polls may undercount ownership because some crypto investors avoid revealing ownership in order to avoid paying taxes. Furthermore, the studies do not take into account teenagers, who are free to buy various cryptocurrencies directly.
According to the study, nearly one-fifth of crypto owners store more than half of their financial holdings in crypto, with nearly one-tenth reporting all of their financial assets in crypto. Crypto owners expect their investments to rise at a rate of 22% per year on average, compared to 7% for non-owners.
Conclusion
Despite recent hurdles, the crypto story is far from done. This is demonstrated by the 30 million US residents who are dabbling in cryptocurrency and the 5–6 million who are effectively wagering their life savings on it.
While we do not propose putting your life savings in digital currency (our approach is a more balanced 10% or less devoted to crypto), it is apparent that many investors are maintaining some portion of their money in digital currency.
