By Pradeep Saran, September 19, 2023
In 2022, the cryptocurrency industry seemed like a daunting minefield for most individuals, as revealed by researchers from the Federal Reserve Bank of Atlanta in a recent blog post. Their analysis of a survey disclosed that the percentage of U.S. adults who possessed cryptocurrency remained stagnant at 10% in 2022, after doubling in each of the preceding two years.
The year 2022 was marked by sensational headlines: plummeting cryptocurrency prices, arrests of prominent figures in the crypto world, and the decline of the NFT craze. Given these circumstances, it’s hardly surprising that investors were hesitant to exchange their traditional currency for digital assets.
The researchers from the Atlanta Fed observed, “This makes us think that the get-rich-quick allure of crypto speculation waned in the wake of the spring 2022 market crash. Buyers’ remorse is real. Euphoria, anxiety, and regret all apply to crypto.
“However, 2023 has been more favorable to cryptocurrency investors. As of the latest data available, Bitcoin, the pioneer of cryptocurrencies, was valued at approximately $26,521, a significant increase from its 2022 year-end value of $16,604. Nevertheless, it still lags far behind its peak price of $67,617 in November 2021.
Interestingly, despite the more favorable market conditions in 2023, the researchers noted that only a limited number of crypto investors seized the opportunity presented by lower asset prices. Kevin Foster and Claire Green from the Atlanta Fed expressed this observation in their accompanying note: “This is pretty much the opposite of Benjamin Graham’s investing philosophy, which sees weakness as a time to buy and strength as a time to sell. In this data, crypto speculators appear to buy high and refrain from buying low.”