crypto had a meltdown why some banks are getting in 6 Why Some Banks Are Getting Into Crypto

Why Some Banks Are Getting Into Crypto

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– The crypto headlines for the first half of 2022 have been brutal: Meltdown; Partys Over Crypto Winter, etc. What was a nonstop free-for-all for those with the stomach for the ride has turned into a giant money drain sucking out roughly $2 trillion in cryptocurrency value since Bitcoins all-time high in November 2021, according to the Wall Street Journal.

– Extreme volatility has described the crypto journey pretty much since Bitcoins launch in 2009. But the most recent plunge has been deeper and more prolonged than other busts.

– So, game over, right?

– Not so fast. Several studies in 2022 show that crypto ownership is still widespread. While collectively crypto investors have lost a ton of value, the same is true of equity investors, with the S&P down 21% for the year through the end of June.

– Morning Consults 2022 report on the state of cryptocurrency found that 17% of U.S. adults said they or someone in their household owns cryptocurrency. Thats down from a peak of around 23% in late 2021, but the same survey found that intent to purchase cryptocurrency remains strong.

– The Ascents survey found that 46.5 million Americans who have never purchased crypto before are likely to invest in crypto for the first time next year.

– Cryptocurrency is no longer only attractive to speculative investors. Everyday Americans are investing in digital currencies as well. Although Millennials, men and higher-income adults, predominantly white, are more likely to own crypto, Morning Consult found that the appeal is fairly broad.

– The top cryptocurrencies purchased, per Morning Consult, are: Bitcoin 75%, Ethereum 49%, Dogecoin 40% and USD Coin 37%.

– The banks and credit unions that had been wondering about if, when and how they should become active in cryptocurrency markets may have removed that from their do list since the crypto market tanked. Based on the above data, that might prove to be premature.

– Today, the vast majority of cryptocurrency flows through exchanges such as Coinbase. But many other players are involved in the business of buying, selling, storing and sending cryptocurrency Squares Cash App is one example. Could traditional financial institutions serve a bigger role in the future?

– Quite possibly yes, if consumers mean what they say. In a 2021 survey, Bitcoin company NYDIG found that 81% of current bitcoin holders would move their bitcoin to their bank. Seven in ten would switch banks to have access to bitcoin products, and 83% would be interested in earning interest on bitcoin in a savings account, money market account, or CD.

– While many financial institutions are taking a wait-and-see approach to cryptocurrency, either not convinced of the underlying merits of

 

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