46% of US Crypto Investors Were High Income Holders: Fed Survey

Sujha Sundararajan
Updated: May 24, 2022, 13:08 UTC

A Federal Reserve survey found that unbanked Americans lead the crypto adoption trend and 12% of US adults bought or held cryptos in 2021.

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Key Insights:

  • 12% of Americans held cryptos in 2021, a Fed survey states.
  • 46% of US adults who held crypto purely for investments had six-figure income.
  • 13% of transactional users of crypto did not have a bank account.

Federal Reserve’s annual report on the 2021 “Economic Well-Being of US Households” released Monday said that crypto ownership levels among Americans are significantly higher among the high-income groups.

“46%, nearly half, of the US crypto investors had an annual income of $100,000 or more, while 29 percent had an income under $50,000.”

However, this was different in the case of profiles that used cryptos such as bitcoin (BTC), ether (ETH), and Litecoin (LTC) for transaction purposes. Less than 24 % of transactional users had an income over $100,000. In comparison, 6 in 10 adults had an income of less than $50,000.

The Fed survey had asked several questions about cryptocurrencies and found that 12% of Americans bought held cryptos in 2021.

The findings noted that overall, 11% held cryptos as an investment, 2% used cryptos to buy goods, and as low as 1% used them to send money to kiths and kins.

Additionally, 13% of users who use crypto for payment are unbanked in the US., and 27% lacked credit cards. On the other hand, people are keen on having crypto investments for retirement savings. It noted,

“99% of those investing in cryptocurrency, but not using it for transactions, had a bank account, and 89% of nonretired cryptocurrency investors had at least some retirement savings.”

What drives crypto adoption in the US?

The US has become a hotbed for crypto developments. The government and some states, such as New York and Miami, have their own digital ‘CityCoins’ dubbed NewYorkCoin (NYC) and MiamiCoin (MIA).

Other states have enacted laws that favor the use of cryptos. For instance, lawmakers in Arizona have proposed tax payments in cryptos, thus driving adoption among the state residents.

Additionally, crypto-related businesses and companies such as Coinbase (COIN) and Kraken (KRAK) have established their base in the US, enabling Americans to buy cryptos quickly.

Another major driver for crypto adoption among US citizens is the acceptance of cryptos as a medium of payment by many merchants.

Crypto adoption in the US is growing

There has been a shift in the perception of cryptocurrency as a mere investment tool over the last few years in the US. More people, particularly the youngsters, are now aware of crypto investment and trading. Few popular cryptos among Americans include bitcoin, ethereum, tether (USDT), Shiba Inu (SHIB), and dogecoin (DOGE).

When BTC prices climbed to an all-time high in November 2021 and hit $67K, the number of crypto investors in the US increased exponentially. 

However, the recent collapse of the Terra network, bringing down the price of the overall crypto market, has made the future murky. Per data from crypto intelligence firm Glassnode, nearly 40% of bitcoin holders have lost money on their investment.

Ben McMillan, the chief innovation officer for IDX Insights, an asset management firm that specializes in cryptocurrency, said that this isn’t going to be consistent. He told Washington Post,

“When you see kind of the power of that technology, it’s impossible not to be bullish. Now, that doesn’t mean it’s going to be an upward line. That doesn’t mean it’s not going to be a volatile path.”

He noted that many investors did not understand the risks that these asset classes pose. He said many of them instead thought about it “as a digital version of gold, or as an inflation hedge.”

About the Author

Sujha Sundararajan is a writer-journalist with 7+ years of experience in Blockchain, Cryptocurrency and in general, FinTech news reporting. Her articles have featured in multiple journals such as CoinDesk, Protos, Bitcoin Magazine, CCN, Asia Blockchain Review, BeInCrypto and EconoTimes to name a few. She holds a Master’s in Journalism from the Indian Institute of Journalism and New Media and is also an accomplished Indian classical singer.

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