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(Kitco News) – The Bank of Canada has published a report that analyzed Bitcoin ownership and use in Canada from 2016 to 2021, providing five perspectives on the behavior of Canadian citizens in relation to the leading cryptocurrency.
The proportion of Canadians holding Bitcoin increased from 5% in 2018-2020 to 13% in 2021, coinciding with the widespread increase in Canadians’ wealth and savings seen during the COVID-19 pandemic.
The launch of multiple cryptocurrency investment products by fintech companies helped on the adoption front as it “provided customers with a wider range of accessible and easy-to-use platforms to purchase Bitcoin.” The preferred method of buying Bitcoin was through mobile apps.
Proportion of Canadians who owned Bitcoin, 2016-21. Source: Bank of Canada
Mobile apps have risen to prominence in recent years as cryptocurrencies have surged in popularity, reflected in the fact that half of people who identify as holding Bitcoin said they made their first purchase in 2020 or 2021. Newer adopters were also more likely than older hodlers to view Bitcoin as an investment vehicle.
Awareness of Bitcoin in Canada remains fairly high, with 90% of 2021 respondents indicating they have heard of Bitcoin and have at least a passing familiarity with it. The level of awareness varied widely among survey participants, with 40% of respondents who claimed to own Bitcoin having a low level of awareness.
Roughly two-thirds of respondents who did not own Bitcoin demonstrated a low level of understanding of how the currency worked.
While the number of Canadians holding Bitcoin is increasing, the study showed that their holdings are relatively small, with the average amount of BTC in 2021 being C$500 and 70% of Canadians owning the equivalent of C$5,000 or less. . .
Share of Bitcoin owners based on the value of BTC holdings. Source: Bank of Canada
Long-term owners tended to hold larger holdings as they benefited from the significant price increase that came in 2020.
Half of the respondents indicated that they had heard of at least one altcoin, with Ether, Dogecoin and Bitcoin Cash being the most cited, but the claimed holdings were small. “For example, only 7% of Canadians own Ether, and about 4% own Dogecoin or Bitcoin Cash,” the report says.
The bull market and subsequent crash of 2021 resulted in 25% of crypto asset owners reporting that their holdings had at some point lost significant value in a price decline, compared to 18% reporting a similar experience in 2019.
In addition, 11% of cryptocurrency holders also reported losing access to their wallets, 9% said they encountered a problem making a cryptocurrency transaction, and 7% reported having funds stolen.
Demographically, “Bitcoin owners are more likely to be male, relatively young, with a college degree, or relatively high income.”
In conclusion, the report noted that “the changes seen in the crypto market and Canadians’ engagement with it have taken place in the broader context of a sharp increase in household wealth in 2020 and 2021, and a corresponding increase in a variety of traditional investments such as mutual funds, real estate, and foreign securities, along with increased exposure to crypto assets.”
Digital assets, in particular, “have been supported by [the] commercial promotion of cryptocurrencies as an asset class and an improvement in the access of retail investors to this market”.
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has gone to great lengths to ensure the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange of commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article accept no responsibility for loss and/or damage arising from the use of this publication.