The JPMorgan analysis is based on a review of over 5 million clients’ cash transfers from banks to crypto accounts.
According to recent JPMorgan Chase study, almost 13% of the American population, or 43 million individuals, have owned Bitcoin at some time in their life.
This proportion has climbed considerably from before 2020, when it was just under 3%, according to a Dec. 13 analysis titled “The Dynamics and Demographics of U.S. Household Crypto-Asset Use.”
JPMorgan’s most recent data comes from an analysis of checking account transactions from a sample of over 5 million consumers. It discovered that 600,000 clients in this study group moved money to cryptocurrency wallets at some time between 2020 and 2022.
The survey also discovered that cryptocurrency owners often made their initial crypto purchases amid price increases. During this moment, the quantity of money transferred into crypto exchange accounts often considerably outweighs the amount of money taken out. In other words, throughout this time period, the majority of individuals were hanging onto their cryptocurrency.
According to JPMorgan, this will alter in early 2022 when crypto values fall. Cash transactions into crypto exchanges have recently significantly outpaced cash transfers out of them.
According to JPMorgan, this is due to both crypto price declines and a broader trend of the US savings rate declining since the pandemic: “We view the rise and fall of crypto use since the onset of COVID as consistent with the joint relationship between retail flows and market prices seen in prior research.” Furthermore, the pattern in crypto flows mirrors the dynamics of family savings, which peaked at record highs early in the epidemic but have now began to fall.”
The survey also addressed whether specific demographic groups are more inclined to purchase cryptocurrency. It discovered that males of all ages purchase much more cryptocurrency than women, and that younger individuals buy far more than older people. According to the survey, more than 25% of millennial males have purchased cryptocurrency, but just around 12% of millennial women and 5% of male baby boomers have.
The study also found that most people’s crypto holdings were modest, with median flows equivalent to less than a week’s worth of take-home income.
However, around 15% of crypto owners have more than a month’s wages invested in crypto.
In 2022, the cryptocurrency market saw a precipitous drop. Bitcoin has dropped from a March 2022 high of $47,459 to $17,208 at the time of writing, while Ether has dropped from $3,521 in April to $1,273 at the time of writing.
The crypto market has fallen as a consequence of market shocks such as TerraUSD (UST) stablecoin losing its peg in May and cryptocurrency exchange FTX going bankrupt in November.
Many cryptocurrency exchanges have reduced trading costs, and Coinbase has indicated that their income has decreased by over 50%.
Despite the drop in crypto prices and trading activity, this new analysis shows that crypto ownership has surged over the previous several years.
