- Crypto and digital assets have plunged in value this year amid inflation and recession fears.
- But that hasn’t dampened interest in digital assets and crypto, a Bank of America survey shows.
- Ninety one percent of respondents say they still plan to buy crypto in the next six months.
The spectacular crash in crypto has not dissuaded people’s interest in digital assets at all, according to Bank of America.
Ninety-one percent of 1,013 people the bank surveyed in early June said they expect to buy crypto in the next 6 months. That is the same percentage as those who actually bought in the past 6 months, BofA noted.
This may be surprising to some considering how far crypto units have fallen as inflation and recession fears grip the market. Bitcoin has lost two-thirds of its value from its record high in early November, and TerraUSD and its sister coin Luna’s one-to-one peg crumbled in May showing that sometimes stablecoins aren’t 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 about 1,100 jobs, or approximately 18% of its global workforce, as part of a restructuring to help manage its operating expenses in response to current market conditions.
The news followed Monday’s news from crypto lender Celsius, which told customers they’re temporarily unable to withdraw funds from the platform.
Despite all of this, there are still buyers, BofA said.
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What does the crypto / digital assets survey say about the market?
“Despite the sharp correction in crypto valuations, consumer interest in the sector remains strong,” BofA analysts said in the report.
About 9 of 10 crypto and digital asset users and prospective users plan to purchase crypto in the next 6 months, the same percentage of people who actually bought in the last 6 months.
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Thirty percent said they didn’t plan to sell any of their holdings in the next 6 months, and the same percentage said they haven’t sold any of their holdings over the past 6 months. Still, most were primarily short-term investors, with 77% typically holding their crypto or digital asset 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 income 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 their main reasons for investing were expectations of price appreciation, portfolio diversification, and interest in the technology and enjoying being part of the crypto community.
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Thirty-nine percent used crypto to make online purchases, with 49% interested in doing so. Meanwhile, 34% used crypto to buy things in person, with 53% interested in doing that.
We think this could be explained by the increased popularity of products that allow the use of stored crypto balances for consumer-to-merchant transactions, whereby an intermediary (such as PayPal via its Checkout With Crypto service, or Visa via its Coinbase Card) converts crypto to fiat currency before the merchant gets paid, ”the analysts said.
Only 10% of those who used crypto as a payment method said they didn’t plan to do so again, mostly because of the “lack of merchant acceptance” (23%).
How much crypto do people own in their portfolios?
Most people 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 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 like DogeCoin and Shibu Inu were second with 26%, followed by stablecoins at 12%. Surprisingly, 8% still owned TerraUSD even though it’s basically worthless now.
NFTs, or non-fungible tokens, are also popular. Among those who currently own crypto or digital assets, 38% own an NFT.
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More than 50% of respondents who own some form of crypto or digital asset said they plan to buy NFTs over the next few months.
Medora Lee is a money, markets, and personal finance reporter at USA TODAY. You can reach her at email@example.com and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday morning.
The Associated Press contributed to this report.