Jamie Ross, a senior Senior Account Manager at Stone Bridge Ventures, reviewed a 2022 survey on crypto ownership and found some interesting insights. The survey, which was conducted by the Bank of Canada, gave details on the ownership of cryptocurrencies among Canadians.
In the report, the results of the survey indicated that many Canadian crypto investors sold off their Bitcoin in 2022 and closed their positions. However, they didn’t shift out of Bitcoin and towards other digital assets because there was a fall in altcoin ownership as well.
Lack of Crypto Knowledge Linked To Fall in Ownership
Jamie Ross of Stone Bridge Ventures predicts that a major reason for this change is that many crypto holders lack proper knowledge of how the asset class works. In fact, the same Bank of Canada survey finds that less than a third of Bitcoin holders are literate when it comes to the Blockchain system. They are aware of how the system operates and what gives the asset its value. Unfortunately, a larger proportion of holders lack knowledge about the asset class
That being said, altcoin ownership remained steady in 2022, showing the same numbers as in 2021. According to the report, only around one percent of Canadians who took the survey had invested in a stablecoin.
Ethereum, which is the second-most popular cryptocurrency and the most popular altcoin, showed a reduction in ownership rates. In 2021, around 7 percent of respondents owned Ethereum tokens, but this fell to 4 percent in 2022.
Recent Collapses of Crypto Exchanges Reduce Confidence
The report also mentions that Bitcoin owners sold off their tokens for profit in 2021. But the fall in Bitcoin ownership from 13 to 10 percent depicts a completely different attitude towards cryptocurrencies. That’s because ownership rates remained steady at 5 percent from 2017 to 2018, despite the fact that prices decreased a lot more than they did between 2021 and 2022.
Just last year, Bitcoin prices experienced high volatility as ‘crypto winter’ took hold. Not to mention, major events such as the collapse of FTX and the TerraUSD stablecoin shook the crypto community. These sudden shifts in sentiment caused people’s trust in crypto to dwindle.
Few People Cite Payment-Related Reasons for Ownership
Stone Bridge Ventures Jamie Ross is of the opinion that last year’s fall in Bitcoin ownership shouldn’t come as a surprise. That’s because many Canadian investors funneled record amounts of money into financial assets – both traditional ones and cryptocurrencies like Bitcoin. This explains the increase in ownership rates from 10 percent to 13 percent in 2021.
Of course, rushing to make an investment isn’t the only reason Canadians showed interest in Bitcoin. The report finds that around 24 percent of holders in 2022 said that their reason for buying the asset was an interest in new technology. In contrast, only 11 percent reported that they bought the cryptocurrency for payment reasons.
Jamie Ross of Stone Bridge Ventures concludes that the volatile conditions of various financial markets, as well as the crypto market, have lowered investors’ appetites for risky assets like cryptocurrencies. Except for a slight uptrend in 2021, the number of crypto holders who purchase tokens for payment-related reasons has gone down from its 2016 peak.
