The Dynamics and Demographics of U.S. Household Crypto-Asset Use

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:

Findings

1. Most crypto users made their first transactions during spikes in crypto-asset prices.
2. Usage of crypto is broader and deeper for men, Asian individuals, and younger individuals with higher incomes.
3. Crypto holdings for most individuals are relatively small—as median flows equal less than one week’s worth of take-home pay—but almost 15 percent of users have net transfers of over one month’s worth of pay to crypto accounts.
4. Most individuals who transferred money to crypto accounts did so when crypto-asset prices were significantly higher than recent levels, and those with lower incomes likely made purchases at elevated prices relative to higher earners.