Crypto-winter impact: 50% reduction in the number of active crypto users, says Bank of America
(Kitco News) The crypto bear market directly affects the still-very-new industry, with Bank of America reporting a more than 50% drop in the number of active crypto users between the peak of one million in November and only 500,000 users in May.
The bank quoted internal data, pointing out that the decline began long before the massive sale in June. Also, according to the bank’s survey, negative sentiment against crypto increased between April and June when the total market value of crypto fell below $ 1 trillion after broad sales, infection risk and the TerraUSD collapse.
“The Bank of America survey of the US population found that sentiment against cryptocurrencies deteriorated between April and June, with an increase from 21% to 30% in those who said they have not invested and have no plans to do so. “the bank said. “Relatively few people view cryptocurrencies as a reliable long-term investment.”
The bank conducted the survey in April and June with a sample size of just over 1,000 people each time.
The cryptocurrency winter of 2022 saw Bitcoin fall more than 70% from its records in November, last trading just under $ 20,000. Ethereum, the world’s second largest cryptocurrency, is down 78% from its records in November, last trading at just over $ 1100.
“Ultimately, cryptocurrencies make up less than 1% of total U.S. household financial assets,” the survey said.
And given how much attention crypto has received in the last couple of years, a surprising statistic was that almost 70% of the US population has not invested or is not interested in crypto.
“Almost 70% of the population has not invested in or is not interested in investing in cryptocurrencies,” the bank said. “The recent declines in cryptocurrencies and negative headlines seem to be having an impact, as there was a jump between April and June in the proportion of respondents who said they have not invested in crypto and are not interested in doing so as well. decline in the proportion of the population who indicated that they use or invest in cryptocurrency and plan to continue. “
Between April and June, there was also a jump in respondents who had “very negative” reactions to cryptocurrency. On the other hand, there was a decline in those who were “very” or “somewhat positive”.
“Many consumers have not participated in crypto markets, and if anything, their tendency to do so has diminished in recent months,” the survey concluded.
Those who remained active participants in the crypto room described that they did it mostly “for fun” or to “follow the latest trends.”
“Relatively few say [they] look at it as a reliable long-term investment, “the survey added.
BofA analysts noted that a fall in overall participation could hurt the crypto market, but they are not ready to make any specific estimates.
“If the crypto markets recover, then there may be a new engagement in them among the public. It is too early to be sure of this, but the fall in these markets may make some more cautious with them in the future.” the survey noted.
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