U.S. households’ involvement in crypto-assets (hereafter, crypto) rose sharply during the COVID-19 pandemic alongside a substantial increase in the overall personal savings rate. Five years ago, only a tiny fraction of individuals held crypto. As of mid-2022, almost 15 percent of individuals had conducted transfers into crypto accounts, according to our data. The trend has potential implications for the health of household balance sheets, given market volatility and uncertainty of how use of crypto-assets may evolve.
This report uses de-identified data covering a sample of nearly 5 million active checking account customers, over 600 thousand of which have conducted transfers to crypto accounts. Importantly, we link the dynamics of such transfers with demographic indicators, enabling analysis of heterogeneity across income, gender, and racial groups.
Our findings can be used to assess differential effects of the rise of crypto investing to-date and further extend our understanding of how financial trend-chasing behavior plays out in the real world. In one of the report’s main conclusions, we estimate that lower-income individuals have fared worse—buying later and at higher prices on average—than those with higher incomes. While our data only show transfers into the crypto ecosystem and not the direct purchases of crypto-assets we estimate that the median investor in crypto has probably experienced substantially negative investment returns in percentage terms. Notably, the dollar values involved have been quite small for most.
In our investigation into how crypto fits into households’ financial health, we organize the analysis around following questions and findings:
