More than 1 in 10 adults in the United States invested in cryptocurrencies or used them to make transactions in the past year, a survey by the Federal Reserve found.

The data are perhaps the most authoritative yet about the level of cryptocurrency use in the U.S. as digital asset investments grow in popularity. The Fed survey, which was conducted in October and November of last year, found that 12% of adults used or held cryptocurrency, including Bitcoin, but just 3% used it for financial transactions.


Additionally, the study revealed that those who hold cryptocurrency as an investment vehicle have disproportionately high incomes, almost universally also use traditional banking services, and have other forms of retirement savings.

The small group that used cryptocurrencies for financial transactions had a much different demographic profile, including people who make much less in income on average than those who use cryptocurrency only for investments. Those who transacted using cryptocurrency were also more likely than the average adult to lack bank accounts and credit cards.

Cryptocurrencies, especially the flagship asset Bitcoin, have exploded in popularity since late 2020 after the start of the pandemic. In early October 2020, Bitcoin was valued at just over $10,000. It then exploded upward to more than $60,000 just a few months later.

Last year was a big year for Bitcoin and other cryptocurrencies. Bitcoin peaked at $69,000 in November, around when the survey was conducted, but it has since fallen in value.

As inflation reached multidecade highs at the beginning of this year and the Fed began hiking interest rates, investors began fleeing the cryptocurrency market in favor of less risky assets. Bitcoin’s value is now resting at about $30,000 — halving its value in just a matter of months.

The decline of the cryptocurrency market has moved somewhat in tandem with traditional stocks, which have experienced a sharp sell-off in recent months as investors fear economic stagnation and a possible recession.

“There is pandemonium across all markets. Inflation is rising, interest rates are rising, and the actual effects at the consumer level are even much more dramatic than the Fed or government want to acknowledge,” cryptocurrency entrepreneur Travis Bott told the Washington Examiner earlier this month.

Despite the recent declines, the Fed survey shows that people are increasingly accepting cryptocurrencies as an investment vehicle. They have also become more institutionally accepted, with Goldman Sachs becoming the first major U.S. bank to trade cryptocurrencies over the counter. Ray Dalio’s Bridgewater Associates also said it plans to back its first cryptocurrency fund.

The survey also revealed just how little the digital assets are being used for transactions as opposed to investment. In theory, Bitcoin and other cryptocurrencies can be used to purchase or sell goods and services, but because of technical barriers and other obstacles, very few stores accept cryptocurrency in lieu of traditional currencies.

A notable exception to the nonacceptance of cryptocurrency transactions is El Salvador, which became the first country to make Bitcoin legal tender.


A big part of why El Salvador wanted to adopt Bitcoin is the country’s enormous reliance on remittances — largely money transferred from immigrants in the U.S. back to relatives in El Salvador.

The Fed survey found that just 1% of those holding cryptocurrency in the past year used it to send money to friends or family.