Still great interest in crypto and other digital assets since the crash
- Crypto and digital assets have plummeted this year due to fears of inflation and recession.
- But it has not dampened interest in digital assets and crypto, according to a survey by Bank of America.
- 91 percent of respondents say they still plan to buy crypto over the next six months.
The spectacular crash of crypto has not discouraged people’s interest in digital assets at all, according to Bank of America.
91 percent of the 1,013 people the bank surveyed in early June said they expect to buy crypto over the next six months. This is the same percentage as those who have actually bought in the last six months, BofA noted.
This may be surprising to some considering how far cryptocurrencies have fallen as fears of inflation and recession grip the market. Bitcoin has lost two-thirds of its value from record highs in early November, and TerraUSD and sister coin Luna’s one-to-one stick crumbled in May, showing that sometimes stable coins are not necessarily stable. TerraUSD and Luna are pretty much worthless now, and lawsuits have been filed.
And it’s not over. On Tuesday, Coinbase Global announced plans to cut around 1,100 jobs, or about 18% of the global workforce, as part of a restructuring to help manage operating expenses in response to current market conditions.
The news followed Monday’s news from cryptocurrency lender Celsius, which told customers that they are temporarily unable to withdraw money from the platform.
Despite all this, there are still buyers, said BofA.
ANOTHER INFLATION RECORD:New level driven by gas, grocery prices and high rents
What does the crypto / digital asset survey say about the market?
“Despite the sharp correction in cryptocurrencies, consumer interest in the sector remains strong,” BofA analysts said in the report.
About 9 out of 10 users of crypto and digital assets and potential users plan to buy crypto over the next six months, the same percentage of people who have actually bought in the last six months.
CRYPTO CRUMBS ?:Bitcoin meant equity for Black, LGBTQ + investors. Where does cryptocurrency leave things?
SUITABLE FOR BITCOIN:Fidelity plans to offer bitcoin in its 401 (k) pension funds. But is it best for you?
30 percent said they had no plans to sell any of their holdings within the next six months, and the same percentage said they have not sold any of their holdings in the past six months. Nevertheless, most were primarily short-term investors, with 77% usually holding crypto or digital assets for less than a year.
The most common crypto transaction was worth less than $ 25. PayPal, SoFi and Square’s CashApp users tended to have smaller average purchase sizes and lower incomes than those who used Coinbase and Crypto.com for their transactions, the investment bank said.
Why do people want crypto?
Of the 58% of respondents who currently own crypto or digital assets, they said that their main reasons for investing were expectations of price increases, portfolio diversification, interest in technology and the joy of being part of the crypto community.
PROTECTIVE CRYPT:Crypto storage: Cold, hot or maybe a little of both?
CRYPTO WORLD:A closer look at crypto-friendly nations
39 percent used crypto to make online purchases, with 49 percent interested in doing so. Meanwhile, 34% used crypto to buy things in person, with 53% interested in doing so.
“We believe this can be explained by the growing popularity of products that allow the use of stored cryptocurrencies for consumer-to-seller transactions, where an intermediary (such as PayPal via the Checkout With Crypto service or Visa via the Coinbase card) converts crypto to fiat currency before the seller gets paid, “said the analysts.
Only 10% of those who used crypto as a payment method said they had no plans to do so again, mostly due to “lack of acceptance from merchants” (23%).
How much crypto do people own in their portfolios?
Most own only a small amount, with 65% having less than 10% of their total investment portfolios invested in crypto or other digital assets. Only 5% said that most of their portfolio was invested in crypto or other digital assets.
What are the most popular digital assets people own?
The most common cryptocurrencies people own are Bitcoin and Ethereum at 75% and 44% respectively. Meme coins such as DogeCoin and Shibu Inu came in second with 26%, followed by stable coins with 12%. Surprisingly, 8% still owned TerraUSD, even though it is basically worthless now.
NFTs, or non-fungible tokens, are also popular. Among those who currently own crypto or digital assets, 38% own an NFT.
NFT LUSTER:9 of the hottest NFT projects will come in 2022
NFT SNACKING:NFT machine opens near Wall Street
More than 50% of respondents who own some form of crypto or digital asset said they plan to buy NFTs in the coming months.
Medora Lee is a reporter on money, markets and personal finance in the USA TODAY. You can reach her at [email protected] and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday to Friday morning.
The Associated Press contributed to this report.
