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Despite the 18-month price decline, current data shows that more people than ever are investing in the cryptocurrency market.
According to a survey sponsored by Michael Weber, a professor of finance at the University of Chicago, 12% of investors owned cryptocurrency in December 2022, up from just 2% in 2018. The Pew Research Center also discovered that 17% of respondents had bought, sold, or utilized a cryptocurrency, with 16% of those people entering the market when values plummeted in the previous year.
Despite the unfavorable press of the previous year, the data indicates that consumers are still investing more money in cryptocurrencies than they are withdrawing. Youth in particular are fond of this asset class. In the 20–40 age bracket, 38% of males and 16% of females own cryptocurrency.
The two main justifications for buying cryptocurrency are expected value growth and portfolio diversity.
Additionally, some cryptocurrency investors may not disclose ownership in order to avoid paying taxes, which would cause the surveys to undercount ownership. Teenagers, who have the freedom to directly purchase various cryptocurrencies, are also not taken into consideration by the surveys.
According to the poll, over one in five cryptocurrency owners say they have more than half of their financial holdings in cryptocurrency, and almost one in ten say they have all of their financial assets in cryptocurrency. Additionally, those who possess cryptocurrency anticipate an average annual return of 22% compared to 7% for non-owners.
In conclusion, the crypto tale is far from done, notwithstanding the difficulties of the past year. The fact that 30 million Americans are interested in cryptocurrency and that 5–6 million are practically risking their entire life savings on it is proof of this.
While we don’t advise putting your entire life savings in cryptocurrency (instead, we advocate a more balanced 10% or less allocation), it’s obvious that many investors continue to hold some portion of their holdings in this form of money.
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