Cointelegraph Team
Cointelegraph
The Bank for International Settlements (BIS) studied the main motives behind Bitcoin adoption by retail investors.
Bitcoin BTC ↑ $16,831 investors are more likely enticed by the cryptocurrency’s rising prices, rather than their dislike of banks or its perceived use as a store of value, a new report from the Bank for International Settlements (BIS) suggests.
In a “BIS Working Papers” report published on Nov. 14, the central bank body looked into the relationship between Bitcoin prices, crypto trading, and retail adoption.
It studied the drivers of crypto adoption by retail investors using crypto trading app downloads as a proxy for adoption and user investments at the time of download.
It found that “a rise in the price of Bitcoin is associated with a significant increase in new users, ie entry of new investors” and that most retail investors “downloaded crypto apps when prices were high.”
The BIS presented evidence that daily downloads of crypto exchange apps increased with the rapidly rising price of Bitcoin between Jul. and Nov. 2021, peaking when Bitcoin’s price was between $55,000 and $60,000 roughly one month before its Nov. 2021 all-time high of just over $69,000.
It added 40% of crypto app users were men under 35 and were part of the most “risk-seeking” segment of the population, from this, it surmised:
Users [are] being drawn to Bitcoin by rising prices — rather than a dislike for traditional banks, the search for a store of value or distrust in public institutions.
“The price of Bitcoin remains the most important factor when we control for global uncertainty or volatility, contradicting explanations based on Bitcoin as a safe haven,” it added.
The BIS assumed app users purchased Bitcoin at the time of downloading a crypto app and subsequently supposed that up to “81% of users would have lost money” if they had purchased Bitcoin over $20,000.
Daily downloads of crypto-exchange apps by Bitcoin Price at the time of first download. Image: BIS
The BIS’s assumptions seemingly correlate with data from blockchain analysis firm Glassnode, who on Nov. 14 confirmed that just over half of Bitcoin addresses are in profit, reaching a two-year low.
#Bitcoin $BTC Percent Addresses in Profit (7d MA) just reached a 2-year low of 51.881%
— glassnode alerts (@glassnodealerts) November 14, 2022
View metric:https://t.co/ik5IkrdoPk pic.twitter.com/boVDTqG8YL
The BIS added its analysis of blockchain data found as Bitcoin prices rose, smaller users purchased, and “the largest holders (the so-called ‘whales’ or ‘humpbacks’) were selling – making a return at the smaller users’ expense.”
It also documented the geography of crypto app adoption and found between Aug. 2015 to Jun. 2022 that Turkey, Singapore, the United States, and the United Kingdom had the highest total downloads per 100,000 people respectively.
India and China had the lowest, the latter seeing only 1,000 crypto app downloads per 100,000 people with the BIS opining that greater legal restrictions on crypto hamper retail adoption in those countries.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.
Recommended Content
Editors’ Picks
Polygon joins forces with WSPN to expand stablecoin adoption
WSPN, a stablecoin infrastructure company based in Singapore, has teamed up with Polygon Labs to make its stablecoin, WUSD, more useful in payment and decentralized finance.
Coinbase envisages listing of more meme coins amid regulatory optimism
Donald Trump's expected return to the White House creates excitement in the cryptocurrency sector, especially at Coinbase, the largest US-based crypto exchange. The platform is optimistic that the new administration will focus on regulatory clarity, which could lead to more token listings, including popular meme coins.
Cardano's ADA leaps to 2.5-year high of 90 cents as whale holdings exceed $12B
As Bitcoin (BTC) gets closer to the $100,000 mark for the first time — it crossed $99,000 earlier Friday — capital is rotating into alternative cryptocurrencies, creating a buzz in the broader crypto market.
Shiba Inu holders withdraw 1.67 trillion SHIB tokens from exchange
Shiba Inu trades slightly higher, around $0.000024, on Thursday after declining more than 5% the previous week. SHIB’s on-chain metrics project a bullish outlook as holders accumulate recent dips, and dormant wallets are on the move, all pointing to a recovery in the cards.
Bitcoin: Rally expected to continue as BTC nears $100K
Bitcoin (BTC) reached a new all-time high of $99,419, just inches away from the $100K milestone and has rallied over 9% so far this week. This bullish momentum was supported by the rising Bitcoin spot Exchange Traded Funds (ETF), which accounted for over $2.8 billion inflow until Thursday. BlackRock and Grayscale’s recent launch of the Bitcoin ETF options also fueled the rally this week.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.