Bank of Canada believes that crypto adoption may increase after the market recovers and clear regulations are launched.
In 2022, Canadian cryptocurrency ownership witnessed a significant decline due to stringent regulations and a market price decrease.
The Bank of Canada (BoC) released a study on July 26th revealing a marked decline in ownership of Bitcoin (BTC) and other cryptocurrencies in the country. For the research, BoC used the annual Bitcoin Omnibus Survey.
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The data showcased a pullback from the immense crypto adoption observed in 2021. As of August 2022, Bitcoin ownership in Canada dropped to 9%. It is worth noting that there was a slight increase, moving the figure up to 10% by the end of the year.
The report further clarified that this decrease in Bitcoin ownership did not imply that investors were diversifying into other cryptocurrencies, stating:
Investors did not appear to shift out of Bitcoin and into other cryptoassets, as we observe decreased ownership of altcoins.
Investment remains the primary motivation for Canadians interested in Bitcoin, with over one-third of the 4,996 respondents in the Bank of Canada's 2022 survey attesting to this.
Based on the report, the majority of Canadians acquired crypto holdings via mobile and web apps, with crypto mining being the third-most-popular method of accumulation for two years running.
Regarding the altcoin ecosystem, Dogecoin (DOGE) has emerged as the most sought-after investment, likely due to the Elon Musk-fueled hype. Other popular choices among Canadians include Ether (ETH), Bitcoin Cash (BCH), and Litecoin (LTC), though not necessarily in that order.
The BoC emphasizes that this research is critical for assessing two conditions that could justify the issuance of an in-house central bank digital currency (CBDC): the possibility of Canadians stopping using cash or widely adopting and using private cryptocurrencies for payments.
The decline in crypto ownership in the country is attributed to factors such as ecosystem collapses, regulatory barriers, and price depreciation. However, BoC voiced optimism that crypto ownership in the region may rebound, given the government’s intention to provide regulatory clarity for the emerging crypto markets.
The shift in Canadian crypto ownership, as revealed by the Bank of Canada's analysis, reflects a complex interplay of regulations, market conditions, and individual investment choices. However, the expectation of clear regulations and more stable market offers should boost crypto adoption once again.
