Federal Reserve i.e. Central Bank of United States of America in its latest survey i.e. Survey of Household Economics and Decision-making (SHED) has come out with interesting findings on Cryptocurrencies in USA.
Rich and Not-So-Rich Use Cryptocurrencies Differently
The survey reports that relatively rich people or people having financial profile with income of less than $50,000 use cryptocurrencies for different purpose than those having income of more than $50,000.
According to the SHED survey, “Those who held cryptocurrency purely for investment purposes were disproportionately high-income, almost always had a traditional banking relationship, and typically had other retirement savings. Forty-six percent of those using cryptocurrencies only for investment had an income of $100,000 or more, while 29 percent had an income under $50,000.”
Cryptocurrencies Added for the First Time in Survey
The SHED survey covered the financial transactions pertaining to period from late October 2020 to early November 2021. More notable feature of this survey was that cryptocurrencies and short-term loan products popularly known as “Buy Now, Pay Later” (BNPL) products were included in the 2021 survey for the first time.
The survey report justifies the decision to include cryptocurrencies in the survey for the first time on the basis of need to better understand consumer experiences with emerging products. Cryptocurrencies, undoubtedly have captured the imagination of people all over the world in recent times.
“Transactional cryptocurrency users also were less likely to have a bank account.“
In America, the survey has thrown light on behavioral aspect of users of cryptocurrencies not only on the basis income but on the basis of possession of bank account and credit card as well. The report says, “Transactional cryptocurrency users also were less likely to have a bank account. Thirteen percent of those who used cryptocurrency for transactions lack a bank account, compared with 6 percent of adults who did not use cryptocurrency. Similarly, 27 percent of transactional cryptocurrency users did not have a credit card, exceeding the 17 percent of non-users without a credit card.”
Since this report highlights that people with low income are using cryptocurrencies for transactional purposes whereas those categorized in high income are using cryptocurrencies for investment purposes. One conclusion from this SHED survey can be drawn that rich in USA rich people are seeing a potential of growth in value of cryptocurrencies and crypto assets that is why they are preferring to stay invested rather than disposing them in transactions like purchase of goods using cryptocurrencies.
SHED Survey Pertains to Period before Terra USD Collapse
It must also be noted here that the survey findings relate to period up to early November 2021 after which there has been continuous decline in the value of cryptocurrencies. In last month itself, one of the prominent cryptocurrencies touted as stable coin namely TerraUSD has been reduced to zero value and caused severe financial loss to its investors.
