Cryptocurrency Ownership Continues to Rise Despite Price Declines

Despite the recent downward trend in cryptocurrency prices, research suggests that an increasing number of people are investing in crypto.

A study conducted by University of Chicago finance professor Michael Weber reveals that in December 2022, 12% of investors owned cryptocurrencies, a significant increase from the 2% reported in 2018. The Pew Research Center also found that 17% of respondents have engaged in crypto investments, trading, or usage, with 16% of them entering the crypto market in the past year during a period of sharp price drops.

These findings indicate a growing resilience and optimism among individuals who view cryptocurrencies as a promising investment avenue, recognizing the potential for long-term gains despite the recent volatility in the market.

Cryptocurrency Investments Thrive

Despite the negative publicity surrounding cryptocurrencies in the past year, the data indicates that people are investing more money in crypto assets than they are withdrawing. This asset class is particularly popular among young men, with 38% of men aged 20 to 40 and 16% of women in the same age group owning cryptocurrencies.

However, it is worth noting that the surveys may underestimate the actual ownership figures, as some crypto investors prefer not to disclose their holdings to evade taxes. Additionally, the surveys do not account for teenagers, who can freely purchase various cryptocurrencies.

The research also reveals that nearly one in five crypto owners report holding more than half of their financial assets in crypto, and around one in ten have all their financial assets in crypto. Crypto holders also have higher expectations for investment growth, with an average anticipated growth rate of 22% per year compared to 7% for non-owners.

Conclusion

Investors should consider that the crypto story is far from over, with approximately 30 million U.S. citizens involved in crypto and an estimated 5–6 million effectively risking their life savings on it. While it is not advisable to invest life savings, a more balanced approach of allocating 10% or less to crypto is recommended. Nevertheless, many investors are keeping a portion of their investments in digital currencies.

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