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Post Urgency: Record Savings Fuels Increase in Bitcoin Ownership Among Canadians
The demographics of new buyers are starting to change, a Bank of Canada report shows
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More Canadians have fallen in love with cryptocurrencies with bitcoin ownership increasing so “sharply” that ownership demographics are beginning to change, according to a Bank of Canada commissioned report released Wednesday.
The share of Canadians who owned bitcoin rose to 13 percent in 2021 from five percent in 2020, the central bank said in its 2021 Bitcoin Omnibus Survey, an annual look at the digital currency that the central bank began tracking in 2016. MEasurements of bitcoin ownership for 2020 came from the Bank of Canada‘s Cash Alternative Survey.
“This increase occurred after broad increases in the savings and wealth of Canadians during the pandemic,” said the Bank of Canada’s summary of the 2021 survey.
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Canadian households had a savings rate of 27.2 per cent in the second quarter of 2020, the height of COVID-19, Statistics Canada reported at the time. That number has fallen over successive quarters and was 6.2 percent in the second quarter of 2022, but it is still above the historical national average of about two percent.
All that extra money resulted in what the Bank of Canada report called “significant increases in Canadian investments in mutual funds and foreign currency-denominated securities, as well as crypto-assets.”
The central bank said easier access to cryptocurrencies also led to more purchases. For example, some fintech companies, such as Wealthsimple Inc., began making bitcoin available alongside more traditional investment options. A small majority of bitcoin owners (53 percent) bought via apps rather than online exchanges (47 percent), mining (23 percent) or visiting a Bitcoin ATM, the report said.
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The Bank of Canada’s survey, conducted in December 2021 by pollster Ipsos, also found that the demographics of bitcoin owners are changing.
Bitcoin owners are still more likely to be “relatively young” men, who are well educated with a good income. But 68 percent of bitcoin owners aged 55 and older were recent buyers, although this age group still makes up only 11 percent of recent owners and 4.6 percent of long-term owners.
“In contrast, both men and young Canadians (aged 18 to 34) appear to be slowing their participation in the bitcoin market,” the report said.
The 34 to 54 age group appears to be picking up, with the cohort’s share increasing to 15 percent in 2021 from about six percent in 2020.
More women also appeared as recent buyers (33 percent) than in the long-term owner category (24 percent), but that may be because men tend to “skew” toward the long-term owner category, the report warned.
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Owners’ educational profiles are expanded to include more individuals with a variety of educational levels, including college/CEGEP (in Quebec), trade, and high school.
The motivations of new buyers were found to differ from long-term owners, with the former more likely to make a purchase for investment reasons than for payment purposes, in contrast to the latter.
If investment was a motivator, it was also the biggest source of buyers’ woes in 2021. 25 percent of survey respondents reported experiencing “price crashes” last year, up from 18 percent in 2019, and no surprise given the value of bitcoin fell 35 percent in 2021. The price of bitcoin so far this year is down 60 percent.
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Crime was another concern for bitcoin owners.
“Owners also reported experiencing a variety of other incidents, such as losing access to their wallet (11 percent), initial coin fraud (seven percent), stolen funds (seven percent) and data breaches (six percent),” the report said.
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RBC PROBE The competition agency has opened an investigation into Royal Bank of Canada’s environmental representations and marketing following a complaint last summer that the bank’s claims of being a climate leader were misleading because of its continued financing of fossil fuel projects. RBC said it “strongly disagrees with the allegations in the complaint.” It was filed by six people with support from various environmental groups, including Ecojustice and Stand.earth, writes the Financial Post’s Barbara Shecter. Photo by Dave Sidaway/Montreal Gazette/Postmedia
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- Darren Fisher, Liberal MP for Dartmouth—Cole Harbour; and Shannon Harding, director of education and engagement, Clean Foundation, will make an announcement on clean energy funding
- Pablo Rodriguez, Minister of Canadian Heritage and Lieutenant Governor of Quebec, will announce federal funding to support the growth of SOPREMA, a manufacturing company specializing in the production of waterproofing, insulation, soundproofing and vegetation solutions for the roofing, building envelope and civil engineering sectors
- Saguenay-Le Fjord Chamber of Commerce organizes a “lunch and learn” with Pascale St-Onge, Minister of Sports and Minister responsible for CED. The theme will be the green transition
- The Storting’s budget officer will publish a new report entitled “Economic and fiscal outlook — October 2022” on the website pbo-dpb.ca
- Canada Mortgage and Housing Corporation releases report titled “The Way Forward for the Economy and Housing – Fall 2022 Update”
- Valerie Bradford, Liberal MP for Kitchener South—Hespeler, will make an announcement in support of a Cambridge-based aerospace manufacturer
- The Future Borders Coalition is hosting the 2022 Transportation Border Summit. A bilateral summit on better borders for travel and trade
- Governor General Mary Simon will deliver a keynote address in Reykjavik, Iceland, on global Arctic cooperation followed by an armchair discussion with Olafur Ragnar Grimsson, founder and chair of ACA, on Arctic issues and on Canada’s role and leadership in the Arctic
- Meeting between G20 finance ministers and central bankers in Washington, DC, ends
- Today’s data: US inflation, US initial jobless claims for the week of October 8
- Earnings: BlackRock Inc., Delta Air Lines Inc., Domino’s Pizza Inc.
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A recession will hit Canada in the first quarter of 2023, sooner than previously thought, economists at Canada’s biggest bank said Wednesday.
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The Royal Bank of Canada made waves in July when the thrift store became the first on Bay Street to announce a recession. Claire Fan and Nathan Janzen originally predicted the slowdown would come in the second quarter, but in a new report they said various factors will “accelerate the arrival of a recession in Canada,” including rising interest rates.
“Fissures are forming in Canada’s economy,” Fan and Janzen wrote.
Read the whole story here.
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It is a fact that environmental disasters such as floods cause expensive damage to Canadian homes every year. Part of the problem is that many homeowners do not understand the risks that come with the areas where they live, such as flooding. Flooding alone costs approximately $1.5 billion in damages annually, and 75 percent of uninsured losses affect homeowners. Our content partner MoneyWise explores ways to protect your home and budget from devastating losses.
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Dagens Posthaste was written by Gigi Suhanic (@gsuhanic), with additional reporting from The Canadian Press, Thomson Reuters and Bloomberg.
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