In what could be a worrying trend for the industry, a Federal Reserve survey found that growth in the cryptocurrency market this year has not led to an equivalent increase in cryptocurrency ownership.
What happened:A survey conducted by the Consumer Finance Institute among Federal Reserve Bank of Philadelphia revealed a disconnect between Bitcoin Bitcoin/USD market price and property over the past two years.
The survey indicated a decline in the ownership rate from 24.6% in January 2022 to 19.1% in October 2022, during the crypto bear winter. At that time, the price of Bitcoin fell by nearly 60%.
Despite the market recovery in the following months, ownership rates did not see a corresponding increase. As of October 2023, only 17.1% of respondents owned cryptocurrencies.
Prices began to accelerate in October 2023, and by January 2024, more than half of the value lost during the crypto winter had been recovered. Ownership, however, fell to 15.5%.
In the next survey, in April 2024, Bitcoin’s share increased slightly to 16.1%, a disproportionate increase compared to the impressive 66% jump in price. Bitcoin also reached its all-time high during this period.
Between April and July, the price fluctuated around peaks, but the survey reported a drastic drop in property prices to 14.7%.
Interestingly, this low ownership rate contradicts the results of the April 2024 survey, when over 21% of respondents indicated that they were willing to purchase cryptocurrencies in the future. In October 2022, this figure was just over 10%.
See also: MicroStrategy’s Bitcoin Strategy Has Outperformed Every S&P 500 Company and Even Nvidia Since 2020, Michael Saylor Says
Why it matters:The CFI survey results raised concerns about the prevailing sentiment around the asset class and the lasting impact of the crypto winter.
Bitcoin has surged 28.85% year-to-date, outperforming blue-chip stock indices like the S&P 500and gold. However, the decline in the number of its owners has highlighted possible concerns about fluctuations in its price, cases of which have multiplied this year.
Price action:At the time of writing, Bitcoin was trading hands at $54,632.87, up 3.71% over the past 24 hours, according to data from Benzinga Pro.
Photo by Igor Faun on Shutterstock
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