With cryptocurrencies like Bitcoin and Doge popping up in the daily news cycle, you’re probably wondering what all the hype is about. You, much like a growing number of Americans, are interested in just what crypto is and what percentage of Americans are invested in cryptocurrency.
Most people fall into one of two camps. Some people say it’s a scam, and others, like the first emperor of Mars Elon Musk, think crypto is the future of finance. The truth lies somewhere in the middle and this article is here to get you up to speed.
What is Cryptocurrency?
Cryptocurrencies, or crypto for short, are digital tokens that can be exchanged for goods and services, more commonly referred to as “money.” Normal fiat currency is traditionally under the control of whatever government issues it. However, cryptocurrency is not.
In the olden days, money had value because it was backed by a physical commodity like gold. Well, thanks to President Franklin D. Roosevelt, this is no longer the case. When he removed the U.S. dollar from the gold standard, meaning Americans could no longer exchange their U.S. treasury notes for actual gold, FDR effectively turned the U.S. dollar into fiat currency. This means that money is only worth something because people believe it has value. So, instead of a paper note being an “I owe you” for gold from the government, it is now technically just a piece of paper.
There are two key differences between traditional fiat currencies and cryptocurrency. The first main difference is that cryptocurrencies do not exist in the physical world. The tokens are completely internet-based and are housed in a crypto wallet, similar to your online bank account.
The second is that cryptocurrencies such as Bitcoin (BTC) are not under the control of any governing body. So, crypto is completely subject to the ebbs and flows of the market. This means that the currency can’t be artificially inflated or devalued by arbitrary government decisions, causing the market to be extremely volatile.
What Percentage of Americans Own Cryptocurrency?
The true percentage of Americans that own cryptocurrency is murky at best. Depending on who you ask, it could be as many as 41 million people.
According to a recent report by the popular crypto exchange Gemini, about 21 million people own cryptocurrency in the United States. Where these figures get murky is these numbers are estimates because the study was done on around 3,000 people but if their math is correct that works out to about 14% of the adult population. It is also worth noting that this survey took place in October and November of 2020 before all the massive gains and losses in the crypto market of early 2021.
With over 4,000 cryptocurrencies on the market, it is hard to know for sure just how much crypto Americans really own. Unlike company stocks, you don’t have to buy a whole coin at once you can invest any amount you want.
If you’re interested in cryptocurrencies remember one thing: there are no safe bets. The bottom could fall out at any time so don’t invest more than you can afford to lose because with crypto you can go from popper to prince in an instant but you can go broke just as fast.