Federal Reserve Annual Report Includes Cryptocurrencies for the First Time: Seen as Preferred Investment Tool Over Fiat Currency

The Federal Reserve in the United States released the "2021 Survey of Household Economics and Decisionmaking" annual report on the 23rd, which carefully examines the financial situation of Americans. The report pointed out that Americans are more likely to consider cryptocurrencies as investments rather than payment tools. This is the first time that cryptocurrency data has been included in the annual report.

The report indicates that in 2021, cryptocurrencies are relatively new digital assets that can be held as investments or used for financial transactions, with the majority of cryptocurrency holders using them for investment purposes.

12% of surveyed adults reported holding or using cryptocurrencies, but only 2% used them as currency for shopping or payments in the past year, and 1% used them for remittances to friends or family. Comparatively, 12% more people view cryptocurrencies as an investment tool.

According to the survey, almost all cryptocurrency investors also have traditional banking relationships and other retirement savings. Among those who purely see cryptocurrencies as investments, 46% have incomes of $100,000 or more, while 29% have incomes below $50,000. Among those using cryptocurrencies for investments, 99% have bank accounts, and 89% of non-retired cryptocurrency investors have some retirement savings.

The report also notes that low-income adults are more likely to use cryptocurrencies for transactions or payments. Among those using cryptocurrencies for such transactions, 13% do not have traditional bank accounts, and 27% do not have credit cards. Nearly 60% of adults using cryptocurrencies for transactions have incomes below $50,000, with only 24% earning over $100,000.

Therefore, the report concludes, "Those who hold cryptocurrencies for investment purposes are disproportionately high-income, almost always have traditional banking relationships, and typically have other retirement savings."

This research was conducted before the surge of the Omicron virus in 2021. The Federal Reserve also stated that if the study had been conducted later, the results might differ.

According to the Federal Reserve's annual survey data, the use of cryptocurrencies for investment is more common among higher economic status individuals, while lower-income individuals are more inclined to use them for payments. This aligns with the original spirit of Bitcoin, as well as why countries like El Salvador and the Central African Republic have adopted Bitcoin as legal tender, and even further plans to create a Bitcoin City to facilitate direct circulation and use of Bitcoin in daily life.

This article is authorized for reposting from Horizon News Network