JPMorgan prepared a report based on money transfers from banks to crypto accounts of more than 5 million customers.
The results of this study showed that about 13 percent of America's population, or 43 million people, have owned cryptocurrency at some point in their lives.
According to a Dec. 13 report titled "The Dynamics and Demographics of U.S. Household Crypto-Asset Use," the number of digital asset users has increased dramatically since 2020, when the figure was only about 3 percent.
After analyzing the current accounts of more than 5 million customers, it was found that among this number of customers, 600,000 people transferred their cryptocurrencies between 2020 and 2022.
The report indicates that digital asset holders typically made their first cryptocurrency purchases during surges in cryptocurrency prices, that is, during the period of maximum growth.
At that time, the amount of funds deposited into cryptocurrency exchanges usually far exceeded the amount of assets withdrawn from the exchanges.
That is, when cryptocurrency prices were rising, the number of holders of digital assets was increasing.
This changed in early 2022, when cryptocurrency prices fell. In recent months, deposits to cryptocurrency exchanges have only slightly exceeded withdrawals from them.
The reason for the decline in citizens' cryptocurrency savings is both a general drop in cryptocurrency prices and a more global trend of a declining savings rate in the United States after the pandemic.
The cryptocurrency trend also tracks the dynamics of household savings, which rose to historic highs at the beginning of the pandemic but began to reverse with changes in government financial policy and an increase in the U.S. Federal Reserve rate.
Who buys cryptocurrencies?
The report also investigated which demographic groups are more likely to buy cryptocurrency.
The report confirmed that men of all ages buy significantly more cryptocurrencies than women, and that younger people buy considerably more than older people.
More than 25 percent of millennial men bought cryptocurrency, while only about 12 percent of millennial women and 5 percent of baby boomer men did.
At the same time, U.S. residents are wary of spending large sums to buy cryptocurrencies. Most transfers amounted to less than a week's household salary.
Only about 15% of cryptocurrency owners have invested more than a month's salary in cryptocurrency.
Recently, cryptocurrency has continued to fall, and consequently confidence in digital assets and the number of their holders continues to decline.
This fall in the crypto market was the result of market turmoil, such as the collapse of TerraUSD (UST), which lost its peg in May, and the bankruptcy of crypto exchange FTX, which declared bankruptcy in November.
Trading fees fell at many crypto exchanges, and Coinbase even said its revenue fell nearly 50 percent.
But despite this decline in cryptocurrency prices and trading activity, this new report indicates that cryptocurrency ownership has still been increasing over the past few years.
The main conclusions of this report are:
1. Most crypto users made their first payments during the surge in crypto-asset prices.
2. More often cryptocurrency is used by men, Asians and young people with higher incomes.
3. Most individuals have small holdings of cryptocurrency. Average digital asset flows are less than one week's household salary. Nearly 15 percent of users have made crypto-transfers of more than one month's salary.
4. Most people transferred cryptocurrencies into their accounts when the prices of digital assets were well above today's levels.
5. Low-income users made overpriced purchases compared to higher-income cryptocurrency holders.
6. The timing of cryptocurrency purchases during a period of significant price increases is characteristic of herd behavior. A wide range of U.S. households bought cryptocurrencies when these assets were trading near their highest levels.
7. Because most low-income households bought cryptocurrency at significantly higher prices, they faced significant losses.
8. The level of cryptocurrency use is higher for individuals with higher incomes.