Despite the ongoing crypto winter, a study by the Bank of America has revealed that investors are still bullish on crypto, with users still viewing it as an investment opportunity. The study also revealed that despite the bear market, they still plan on purchasing crypto in 2022.
Not All Is Gloom And Doom
While investors are jittery and wondering how long the latest crypto winter could last, a survey conducted by the Bank of America has painted a positive sign, signaling a ray of hope during a rocky time for cryptocurrencies. A survey of 1000 respondents conducted by the bank has revealed that investors are still waiting for the ideal moment to dive into the crypto market. The survey revealed that 90% of the respondents plan to purchase cryptocurrencies over the next six months.
The study also revealed that the number of individuals that owned crypto was similar to the number of users planning to enter the crypto space. This goes on to show that the general public is still bullish about crypto, a fact acknowledged by even the most well-known crypto skeptics.
HODLing Through The Doldrums
Around 30% of the respondents stated that despite the massive decline in the crypto market and the prevailing bear market, they had absolutely no intention to sell, preferring to HODL their assets instead. However, analysts have pointed out that the prevailing bearish trend could last.
An analyst for the Bank of America, Jason Kupferberg, stated that researchers had gotten the data after the collapse of Terra’s LUNA, with the results still showing a positive sentiment towards crypto on the part of investors. However, he also pointed out that users should be careful as the current sentiment could provoke a further fall in the markets.
“I think today is an example of bad headlines, and it wouldn’t be surprising to see another breakdown in the crypto stock and in the Bitcoin price itself.”
Online Purchases Using Crypto Also Booming
The survey also threw up another interesting statistic, with 39% of respondents revealing that they used cryptocurrencies as a mode of payment for online purchases. This differs from the oft-repeated narrative of crypto-enthusiasts who define them as a store of value and a hedge against inflation. However, Kupferberg pointed out that while there isn’t a high level of adoption as yet, there could be an increase in certain types of crypto-to-fiat products.
The CEO of the Bank of America had earlier stated that it does not plan on entering the crypto space thanks to current US regulations, which prohibit them from being involved in any activities associated with cryptocurrencies. However, this fact could change in the future, thanks to the high demand for crypto-related products.
Bank Of Canada Survey Throws Up Similar Story
The Bank of Canada, in its own survey, also threw up some interesting numbers, with the country reporting a 2x increase in Bitcoin (BTC) use. The numbers back up the story, with over 13% of Canadians owning Bitcoin in 2021, as compared to just 5% in 2020. The bank stated that, on average, BTC holders owned an average of $500 worth of the cryptocurrency. However, it revealed that holders are using it mostly as a speculative asset and not as a mode of payment.
Volatility Hindering Adoption
The study also revealed that the general volatility associated with cryptocurrencies was detrimental to the wider adoption, along with generally high transaction costs. The report explained,
“For example, prices of crypto assets such as Bitcoin and Ether were generally four to five times more volatile throughout 2021 than the S&P 500 stock market index was. Sudden price corrections mean that investors who hold these types of crypto assets can be exposed to significant financial losses.”
In early April, another study carried out by the Bank of Canada claimed that crypto investors in Canada have a lower level of financial literacy but are exposed to greater financial risks.
