CRYPTO ADOPTION EVOLVED

In December last year, JP Morgan publish what seems to be a comprehensive crypto report to date. The report begins with what short overview of crypto adoption in the US. The author reviewed that almost 15% of the US population used crypto or invested in crypto at least according to JP Morgan data. They attribute the spike in crypto adoption to the pandemic specifically the result of a stimulus that led to more investment. It is reviewed that their data simply include over 5 million JP Morgan customers and reviewed that over 600 thousand of them made transactions related to crypto.

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They suspect that many customers lost money in crypto but they can be sure because they can only see fiat transfers in and out. The author also explained that they structure their crypto report into three questions. The first of it is, how has crypto adoption evolved. The second of it is, what is the demographic of people using cryptocurrencies? Third of it is, how much financial risk did retail investors have? You should know that the third question is a bit concerning because some jurisdictions have been considering banning retail investment in crypto. The author talks about their four key findings and the first is that most Americans bought crypto for the first time when prices were spiking. This is not very surprising and it is also the reviews that the pandemic price pump managed to increase crypto adoption from 3% to 13%.

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The interesting part is that the author uses JP Morgan data, dating back to 2015 in their analysis. They confirmed that they count all transactions to the crypto exchanges platform has been flows into crypto and any transaction as flowing out of crypto. They also said they only analyzed the most active customers at JPM and active customers mean any customer that carries out five transactions per month totaling $1,000. It is not surprising that the number of new crypto users has been almost correlated to BTC price action. The author says that crypto account exhibit herd-like behavior. They also acknowledged that herd-like behavior come been seen in other asset classes but insist that the effect is more pronounced in crypto.

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They also reviewed something bullish and that is between 2017 and mid-2022, they were more inflow to crypto than they were to check accounts. This suggests that crypto investors mostly buy and hold. This is consistent with the report from the bank of International settlement which found that more than 50% of holders become long-term hurdlers. The second finding in JP Morgan's report is that most investors are young male Asian and have a high income. The author points out that this finding is accurate with other crypto findings and surveys. Regarding the raw numbers, 20% of millenniums hold crypto compared to 11% for GenX and 4% for baby boomers. Men are as twice likely to hold crypto as women on average. Men also invest in crypto twice as much as women.

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