- Reports released by the research organizations S&P Global Market Intelligence and YouGov as well as the cryptocurrency exchange Gemini point to the growing adoption of cryptocurrencies, particularly among younger consumers. S&P found that 20% of survey respondents purchased, traded or received cryptocurrencies, with the highest crypto adoption among millennial (35%) and Gen Z (33%) consumers.
- According to the March 31 S&P report, under a fifth (19%) of cryptocurrency participants have used the tool for payments, but many participants are buying crypto (64%) or selling it (33%). Most U.S. cryptocurrency buyers (85%) purchased digital currencies, because they believed in their long-term investment potential or that they could serve as a "store of value," Gemini's April 4 report found.
- Nearly seven in 10 U.S. respondents to YouGov’s survey said they don’t quite understand cryptocurrency. Meanwhile, 42% of U.S. survey respondents in Gemini's survey said accessing educational resources would make them more comfortable with buying cryptocurrency.
Despite the overall knowledge gap, the research from S&P, YouGov and Gemini indicates that cryptocurrency adoption is increasingly held by a diverse group of consumers. Gemini’s report found that cryptocurrency ownership for Black Americans increased to 17% last year from 9% in 2020, and for Latino and Hispanic Americans, it climbed to 22% last year from 13% in 2020. White American ownership rose to 71% last year from 55%.
Gemini also found that about a third of all U.S. cryptocurrency owners identify as women, but 39% of respondents who said they plan to buy cryptocurrency in the coming year were women. S&P's report also showed men were more likely to own crypto, with 28% of owners identifying as male and 12% as female.
There were other demographic differences, too. For instance, crypto owners tended to be wealthier, with 27% having annual household incomes of more than $100,000 and 18% earning less, S&P found.
In addition to the desire for more crypto educational resources, multiple hurdles prevent cryptocurrency adoption as a payments tool. As S&P pointed out, cryptocurrency wallets are not user-friendly for the typical consumer, cryptocurrency transactions lack an intermediary to resolve disputes arising from fraud or other issues and few merchants accept cryptocurrency as a form of payment.
Despite the learning curve for cryptocurrencies, S&P identified several areas for payments providers to engage with cryptocurrency enthusiasts. More than half (52%) of millennials said they would be interested in exchanging loyalty rewards for cryptocurrency, and 45% of survey respondents who earn more than $125,000 annually said they would prefer to earn cryptocurrency rewards for their transactions, according to the report.
Nearly half of millennial (47%) and Gen Z (42%) respondents said they would be interested in linking their exchange-issued cryptocurrency card balances to a debit card, S&P said.
S&P noted that it anticipates more sellers accepting cryptocurrencies to appeal to customers. According to Gemini’s report, less than one-fourth of North American survey respondents (23%) view cryptocurrency as the future of money, lagging behind respondents who feel this way in Africa (59%) and Latin America (58%).
Though fewer Americans are as enthusiastic about cryptocurrency as others around the world, the technology has attracted noteworthy proponents like Mark Cuban, the billionaire entrepreneur and co-host on ABC’s Shark Tank.
Cuban recently appeared on the California Rebel Base podcast and said, "Understanding crypto and how it can be used, whether for government purposes or global payments, however it may be, has to be a goal for the United States of America. And that’s gonna take government intervention and that’s gonna take smart government."
The federal government is taking a closer look at cryptocurrencies, especially following President Joe Biden's executive order on digital assets last month, which pressed agencies to deliver reports on the topic and explore possible innovations and regulations related to the emerging asset class.
As payments providers cautiously enter the cryptocurrency space and consumers attempt to understand what it’s all about, Congress members, the Securities and Exchange Commission and the Commodity Futures Trading Commission are beginning to contemplate how to oversee the emerging industry.
On the other hand, various U.S. cities are actively seeking ways to incorporate cryptocurrencies into their functions to lure companies and crypto fanatics, but the volatility of the digital asset could make it harder for local governments and businesses to accept it as a form of payment.