FED research reveals 46% of American cryptocurrency owners earn over $100,000

The digital asset market has flourished in recent years, particularly in terms of acceptance, despite a few obstacles. Investors, dealers, and prominent financial institutions from throughout the globe have identified the asset class. The United States is susceptible.

The Federal Reserve Board of the United States (Fed) has incorporated cryptocurrency statistics into its Economic Well-Being of American Households report for 2022. The Federal Reserve published its ninth annual report, which examined survey findings from 11,000 people surveyed between October and November 2021.

Fed reports include cryptocurrency information for the first time.

The Fed included cryptocurrencies for the first time in the poll because it wanted to see how innovative products affected customers. According to the Federal Reserve, the bulk of crypto investors in the United States are high-income individuals who own crypto for investment motives. People with low incomes mostly use cryptocurrencies to buy and sell things because they don’t have bank accounts.

78 percent of Americans described their financial situation as “okay” or “comfortable” in the Fed’s most recent annual report, the greatest level of financial well-being since the Fed began collecting data. This represents a 3% increase over the previous three years. As a measure of financial wellness, the research states that 68 percent of Americans could pay a $400 emergency bill with cash or its equivalent alone.

The Federal Reserve examined bitcoin usage for the first time. According to the report, by 2020, 13% of adult Americans will own or use cryptocurrencies. The Federal Reserve found that 11% of people who invest in crypto do so as an investment, 2% use it to buy things or pay for things, and 1% send it to family or friends.

The majority of cryptocurrency investors have a high salary, a regular banking relationship, and retirement funds. 48 percent of respondents reported an annual income of at least $100,000, while 89 percent of non-retired respondents had a retirement fund. 29% of the population made less than $50,000 per year.

A typical crypto user has a drastically different profile than an investor. According to the Fed’s research, 60% of these users had incomes below $50,000, and 20 percent had incomes below $25,000. Twenty-four percent of respondents earned more than $100,000 annually.

Thirteen percent of respondents were not bank account holders. In comparison, 6% of adult Americans did not have a bank account. Compared to the general population, 27% of those using crypto for transactions did not have credit cards.

According to this Fed research, consumer financial well-being has reached its best level since the survey’s inception in 2013. Even though the news was talking about inflation and an upcoming economic crisis, 48% of people thought their local economy was strong or great.

Despite market instability, crypto’s popularity soars.

The stats indicate a great deal of potential. 12 percent of individuals have used bitcoin in the past year, according to the report. Given how little crypto presently counts, if it acquires popularity, it might lead to a significant increase in usage.

Despite the growing pace, people that utilized bitcoins for transactions had the following disadvantages: According to the results of the FED poll, nearly one-fourth of respondents lack a high school diploma.

Along with other US government organizations, the Federal Reserve has increased its focus on the digital asset market. Due to their increasing popularity, authorities have been pushed to confront these new technologies and their possible implications for the economy as a whole. The Fed, for its part, is considering establishing a digital money system.

Some analysts believe that the Federal Reserve’s policy will increase the prices of cryptocurrencies and gold. The Federal Reserve just said that interest rates will go up by 0.5%. This is the biggest increase in rates since 2000.

Similar to other markets, the crypto market has collapsed due to the same causes that affect traditional finance. Nonetheless, legislators are worried about investor protection and a spillover impact, necessitating a rise in regulatory focus. As more people are likely to adopt this idea and market swings keep happening, this idea should soon become law.

Chainalysis, a company that analyzes blockchains, saw a huge surge in bitcoin use in 2017. In its 2021 Global Crypto Adoption Index study, the blockchain intelligence company predicted that the use of digital assets like bitcoin would rise by 880% around the world.

The United States was ranked seventh overall for adoption by Chainalysis. Following Vietnam on the list were India, Pakistan, Ukraine, Kenya, Nigeria, and Venezuela. Chainalysis says that the institutionalization of bitcoin trading in the US caused a drop in peer-to-peer trade volumes, which pushed the country down many charts.

This is an important milestone for the whole bitcoin sector. It is important to note that sentiments and story evolve with time. Despite movement in the right direction, this small market remains susceptible to criminal activity and regulatory obstacles. So, the nature of the cryptocurrency market is still very hard to predict, at least for the near future.

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