Crypto Winter Of 2022 Dealt A Death Blow To Bitcoin And Other Coins? Fed Report Indicates A Lasting Impact
By Benzinga
In what could be a concerning trend for the industry, a Federal Reserve survey found that the cryptocurrency market’s growth this year has not resulted in an equivalent rise in cryptocurrency ownership.
What Happened: A survey by the Consumer Finance Institute of the Federal Reserve Bank of Philadelphia revealed a disconnect between Bitcoin’s (CRYPTO: BTC) market price and ownership over the last two years.
The survey indicated a drop in ownership rates from 24.6% in January 2022 to 19.1% in October 2022, during the bearish crypto winter. Around this time, the price of Bitcoin tumbled nearly 60%.
Even with the market’s recovery over the subsequent months, the ownership rates did not see a corresponding increase. By October 2023, only 17.1% of the respondents owned cryptocurrency.
Prices started accelerating in October 2023, and by January 2024, more than half of the value lost during the cryptocurrency winter was regained. The ownership, however, dropped to 15.5%.
By the next survey in April 2024, ownership slightly increased to 16.1%, a disproportionate rise compared to the impressive 66% jump in price. Bitcoin also hit its all-time high in this period.
Between April and July, the price fluctuated around highs, but the survey reported a drastic decrease in ownership to 14.7%.
Interestingly, the low ownership contradicted the findings of the April 2024 survey, when more than 21% of respondents indicated a willingness to purchase cryptocurrencies in the future. In October 2022, this number was just over 10%
Why It Matters: The findings of the CFI survey raised concerns about the prevailing sentiment around the asset class and the lasting impact of the cryptocurrency winter.
Bitcoin has jumped 28.85% year-to-date, offering better returns than blue-chip equity indices like the S&P 500, and gold. However, its declining ownership pointed to possible concerns over its price fluctuations, instances of which have increased this year.
Price Action: At the time of writing, Bitcoin was exchanging hands at $54,632.87, up 3.71% in the last 24 hours, according to data from Benzinga Pro.
Photo by Igor Faun on Shutterstock
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