Fed Report Shows Who’s Actually Using Crypto and How
Who actually uses cryptocurrency, and why? A new report from the Federal Reserve shows that for some, digital currencies like bitcoin can be a real alternative for those who lack financial access. Although crypto schemes and spectacular busts get a lot of attention, peer-to-peer digital money has transactional use for the unbanked.
Every year, the Fed puts out a publication called the Survey of Household Economics and Decisionmaking. Since 2013, it has collected survey responses from American families about their finances, job situations, and abilities to cover unexpected expenses.
The report for 2021, “Economic Well-Being of U.S. Households in 2021,” was just released in May. For the first time, the Fed included questions about cryptocurrency in the survey. The responses from the 11,874 participants of all ages, incomes, ethnicities, and educational levels show that depending on your state of life, you might be using digital currency in very different ways.
The new data on cryptocurrency usage is on page 46 of the report. First, it finds that 12 percent of participants, a little over 1,400, held or used cryptocurrency at some point over the previous year. If that extrapolates to the general American population, that suggests that almost 40 million Americans were involved in cryptocurrency last year.
This is in line with other estimates of American cryptocurrency usage; in 2021, for instance, the Pew Research Center reported that around 16 percent of Americans, or 53 million, had ever bought or held cryptocurrency. That these two estimates are so close suggests that Americans may be becoming more comfortable with cryptocurrency, since the Fed report only examined activities over the previous year.
The new Federal Reserve report is helpful because it breaks down the groups who have either invested in cryptocurrency—that is, bought it to hold and trade for a profit—versus those who use the cryptocurrency for transactions—as a digital cash. It furthers dissects those groups out by income and banking level.
Most of the participants who said they used cryptocurrency in 2021 did so as an investment. Some 11 percent of the survey participants reported such, then three percent reported using it as a payment mechanism. Two percent said they used cryptocurrency to purchase goods or services, while another one percent said they u
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