A report by the Institute for Consumer Finance at the Federal Reserve Bank of Philadelphia found that cryptocurrency ownership has declined during market downturns, despite rising bitcoin prices. Data from multiple surveys show that interest in and ownership of cryptocurrency have not increased, even as prices have soared. The report argues that more research is needed into how consumers respond to market fluctuations.

Report explores the impact of price changes on cryptocurrency ownership

The Consumer Finance Institute (CFI) at the Federal Reserve Bank of Philadelphia released a report on Friday, authored by Senior Advisor and Research Fellow Tom Akana, titled “Do Price Changes Affect Cryptocurrency Ownership?” The report explores how cryptocurrency price fluctuations affect consumer behavior and ownership patterns.

Akana describes the data collection process: “Since January 2022, the Consumer Finance Institute (CFI) has collected information on cryptocurrency ownership from six different surveys; all six asked about current cryptocurrency ownership, while three also asked about the likelihood of purchasing cryptocurrency in the future.” The findings are part of CFI’s Labor, Income, Finances, and Expectations (LIFE) Survey, which looks at economic behaviors, including cryptocurrency ownership. The report details:

CFI survey data collected in 2022 shows a shift in cryptocurrency ownership in response to the crypto winter; reported ownership as well as interest in purchasing crypto both decreased as market values ​​fell.

The report highlights that despite the sharp increase in bitcoin prices since October 2023, ownership has not followed suit.

“Since the LIFE Survey began collecting data on cryptocurrency ownership in October 2023, the price of bitcoin (our market proxy) has increased significantly,” Akana noted.

However, across the four surveys, ownership rates have fallen slightly, despite evidence that market performance has generated increased interest in future purchases.

The report concludes by recommending further investigation into “specific consumer entry and exit patterns [to] provide a clearer explanation for these observations.”

What do you think of the findings in the Federal Reserve Bank of Philadelphia report? Let us know in the comments below.
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