Chicago, IL, March 21, 2023 (GLOBE NEWSWIRE) — Chicago, IL – March 21, 2023 – The Financial Health Network, the nation’s authority on financial health, with support from Prudential Financial, has today released new data analyzing the demographics of cryptocurrency ownership. After a turbulent year in crypto, recent data suggests that cryptocurrency ownership has declined following the collapse of the cryptocurrency market in late 2022.
Only 11% of consumers currently hold cryptocurrencies or digital assets, according to a new survey collected by the Financial Health Network as part of the FinHealth Spend study. This represents a decline from pre-collapse cryptocurrency ownership estimates, which were between 16% and 17%.
While studies conducted prior to the collapse of cryptocurrency exchange FTX indicated that cryptocurrency ownership was more prevalent among black consumers than white consumers, new data suggests that ownership among black investors—just 8%—is now lower than Asian and Latino consumers and statistically similar. to white consumers.
The study also found that cryptocurrency holders are younger, more often male, and have higher incomes than non-cryptocurrency consumers, which is consistent with findings from previous cryptocurrency ownership surveys. Cryptocurrency holders were, on average, a full 10 years younger than consumers without cryptocurrency holdings (41 versus 51 years). More than 1 in 5 households with annual incomes above $150,000 have cryptocurrency, compared to just 1 in 20 households with incomes below $30,000.
“The sharp decline in cryptocurrency ownership among black and Latino consumers suggests that these investors have more frequently divested from cryptocurrency holdings over the past year,” said Angela Fontes, vice president of policy and research at the Financial Health Network. “Given that we know from other research that Black and Latinx consumers are also less likely to hold traditional equity investments, this may mean that these communities are disproportionately affected by the recent crypto failures.”
Rather than being an alternative to traditional investment, current owners appear to be holding cryptocurrency as part of a larger investment strategy. Cryptocurrency owners invest in the stock market more often than non-owners. 86 percent of cryptocurrency owners have a retirement account, compared to just 63 percent of non-owners, and three times as many cryptocurrency owners have taxable investment accounts as non-owners. In general, cryptocurrency owners are more often financially healthy than non-owners; 43% of cryptocurrency owners fall into the Healthy category, compared to only 34% of non-owners.
One reason consumers may remain in the cryptocurrency market despite the recent volatility is to take advantage of the ease with which cryptocurrencies cross international borders.
“In the wake of the crypto crash, rather than being a substitute for traditional investment mechanisms, cryptocurrency and digital assets appear to be part of a larger, diversified portfolio for most owners,” notes Fontes. “However, we see some indications that for consumers who need to easily send or spend money across borders, cryptocurrency may be a desirable alternative to traditional products.”
First- and second-generation immigrants more often have cryptocurrency assets (14%) compared to non-immigrants (10%). In addition, consumers who indicated that they send money internationally more often have cryptocurrency (14% vs. 10%) compared to consumers who do not send money internationally.
Methodology
Data for this release comes from the FinHealth Spend Survey, made possible through financial support from Prudential Financial. Data was collected between January 5 and 30, 2023 using the Understanding America Panel. Understanding America is a probability-based panel of consumers aged 18+ designed to be representative of the US population. The study included responses from 5,055 consumers (margin of error +/- 1.4 pp). A comprehensive list of all study questions, tables of top-level results for each question and detailed methodology are available here.
About the Financial Health Network
The Financial Health Network is the leading authority on financial health. We are a trusted resource for business leaders, decision makers and innovators united in a mission to improve the financial health of their customers, employees and communities. Through research, advisory services, measurement tools and opportunities for cross-sector collaboration, we promote awareness, understanding and proven best practices to support better financial health for all. For more about the Financial Health Network, visit www.finhealthnetwork.org and follow us on Twitter at @FinHealthNet.
Endnotes
¹ Charlotte Principato, Jesse Wheeler and Sonnet Frisbie, “The Crypto Report: Our Analysts on the State of Crypto,” Morning Consult, June 2022.
² Charisse Jones and Jessica Menton, “Black, Latino, LGBTQ investors see crypto investments like bitcoin as ‘a new path’ to wealth and equity,” USA Today, August 2021.
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Percentage of consumers holding cryptocurrency by race/ethnicity
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Percentage of consumers holding cryptocurrency by immigrant status and use of remittances
