Share of Americans invested in cryptocurrency grows by 125% despite crypto winter

The cryptocurrency market is in turmoil, with assets like Bitcoin (BTC) registering significant lows in recent months, a factor that can presumably sway the investment trend among Americans. However, the number of investors opting to get involved in the sector is growing despite the lingering uncertain future as digital assets operate in an environment marred by a struggling economy and the threat of harsh regulations. 

In particular, data acquired by Finbold indicates that as of the 2022 summer season, 18% of Americans had invested in different cryptocurrencies. The figure represents a growth of 125% from the share of 8% of Americans who had a stake in the crypto space during the summer of 2020.

By the 2022 summer, 15% of Americans still had plans to invest in cryptocurrencies, highlighting the belief in the sector despite the market downturn. The value represents a growth of about 36.36% from 11% of Americans who had expressed the intention to venture into cryptocurrencies during the summer of 2020. 

Data on Americans’ investment in crypto is retrieved from the Statista Global Consumer Survey that sampled views from over 1,000 U.S. adults aged between 18 and 64 years old. 

Investors ignoring crypto winter

Interestingly, Americans’ growing interest in crypto amid extended bear markets partly goes against historical trends where a price drop has not attracted more people. 

At the same time, in recent months, the sector has been hit with fraud incidents, with the infamous Terra (LUNA) ecosystem crash taking center stage, with the collapse occurring when more investors turned to stablecoins to help alleviate the crypto volatility. 

Notably, the growth indicates the investors in question can stomach the volatility. Such investors likely understand crypto is still an emerging asset class and technology whose impact on the general finance sector is yet to be fully known. In this line, some investors opt to ignore the short-term price volatility and focus on potential future growth. 

Drivers for continued investment in crypto

Several drivers are likely informing this trend, with making quick money standing out. Over the years, crypto has been considered to return significant profits in a short time compared to traditional assets like stocks. In this case, investors who missed out on last year’s bull run led by assets like Bitcoin and Ethereum (ETH) are potentially buying in the dip with the expectations the sector will rally again. 

Notably, this is one of the riskier motivations for investing in digital assets. In most cases, this strategy’s success depends upon an investor’s ability to time purchases and sales perfectly.

Of importance to mention is that young investors are potentially among the advocates of investing in crypto as a majority hold a genuinely positive outlook on the sector. Therefore, they have the assets expected prices. On the flip side, older investors are known to be more cautious about the industry and the associated risks. 

The growth among investors has also correlated with the ability to easily purchase cryptocurrencies with the emergence of new apps catering to the needs of retailers. 

At the same time, leading institutions embraced cryptocurrencies triggering a bandwagon of retail investors. Interestingly, some institutions are probably betting on the sector’s growth, as highlighted by America’s oldest bank BNY Mellon, which has received regulatory approval to become the first mainstream lender to offer crypto services. 

Meanwhile, other institutional giants are likely taking a back seat and monitoring how the market trends will turn out.

Possible barriers to crypto investments

Due to America’s advanced crypto sector, it is worth noting that there exist potential barriers. Perennially, most people have stayed away from crypto due to factors like complexity. A section of investors still finds the sector too complicated to understand. 

In the long run, crypto proponents maintain that the rate of investments will likely grow because previous years have laid the foundation for building the proper infrastructure. 

Additionally, cryptocurrencies will probably be integrated more into sectors like payment systems. However, regulation uncertainty remains a crucial concern for most Americans. Notably, the White House and Congress are leading various initiatives to bring clarity to the sector.