Violet Vallaya
A recent annual household survey conducted by the Federal Reserve System revealed the number of United States adults reporting crypto ownership or usage dropped to approximately 18 million in 2023. This decline represents a significant shift in crypto adoption trends, with only 7% of surveyed U.S. adults reporting crypto use during the 12 months leading up to October 2023. This figure is down from 10% in 2022 and 12% in 2021.
The survey revealed that only 1% of adults reported using crypto for payment purposes or to send money. This sharp decline from previous years suggests that people are increasingly hesitant to use cryptocurrencies for everyday transactions. Interestingly, nearly 30% of those who did use crypto for financial transactions cited the preference of the receiving party or firm as the primary reason. This indicates that businesses and individuals are not yet fully embracing crypto as a viable payment method.
While the survey did not explicitly delve into trust-related concerns, it’s worth noting that a lack of trust in traditional banking systems could be a contributing factor among individuals with a preference for using crypto in financial transactions. Some may perceive crypto as a more secure alternative, while others remain skeptical due to its decentralized nature and lack of regulatory oversight.
For the 1% of respondents who used crypto for transactions, the ability to send funds faster and privacy concerns were the most commonly cited reasons. Cryptocurrencies offer the advantage of near-instantaneous cross-border transactions, which can be particularly appealing for international remittances. Additionally, privacy-focused coins provide an extra layer of anonymity, appealing to those who value discretion in their financial dealings.
The survey found that individuals with annual incomes of $100,000 or more were more likely to have used crypto for any reason. Higher-income levels may correlate with greater familiarity and comfort with digital assets. Conversely, those with lower incomes may face barriers to entry, such as a lack of knowledge or limited access to crypto platforms.
Millennials (aged 30 to 44) constituted the largest share of crypto users, followed closely by adult Generation Zs (aged 18 to 29). This generational divide highlights the growing acceptance of cryptocurrencies among younger demographics. However, it also suggests that older generations remain cautious or uninformed about crypto.
Men were three times more likely to use crypto than women. This gender gap reflects broader trends in the tech and finance sectors, where women are often underrepresented. Efforts to bridge this gap and promote crypto literacy among women could contribute to increased adoption.
Black and Hispanic adults were the most common crypto users for financial transactions, while Asian adults were the largest demographic using crypto as an investment. White adults were the least likely to use crypto for any reason. This highlights the importance of considering cultural and socioeconomic factors when analyzing crypto adoption rates.
