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Seven percent of US adults used cryptocurrency in 2023, either as an investment tool or for making financial transactions, according to data from the Federal Reserve.
Cryptocurrency is a type of digital asset used for electronic transactions. Instead of operating through a centralized bank or backed by a government, cryptocurrency is operated independently. Transactions are publicly logged on a ledger called a "blockchain," making information about cryptocurrency trading available to all currency holders. Because all the transactions are thus communally verifiable, blockchains are uniquely tamper-resistant.
The values of cryptocurrencies depend on many factors, including supply and demand. There are a limited number of existing “blocks” — a digital collection of transaction data — on a blockchain, and generating new blocks involves a complex process called “mining.” Mining cryptocurrencies involves using software to solve computational problems in exchange for units of the cryptocurrency. As with stocks, the value of a block fluctuates as people invest in or sell their cryptocurrencies.
There are many different cryptocurrencies, and their popularity varies. Examples include:
Cryptocurrency is most often used as an investment: in 2023, 7% of all US adults bought or held crypto as an investment, 1% used it to pay for something, and another 1% used it to send money to friends or family.
Among those people, 29% said they used cryptocurrency because it was preferred by the other party in a transaction. Other reasons for trading in crypto included transfer speed (18%), privacy (16%), lower transaction costs (13%), safety (7%), and lack of trust in banks (4%).
Men are nearly three times more likely to use cryptocurrency: 11% of men used cryptocurrency in 2023 compared to 4% of women.
Usage also varied by income level. People with high incomes (family income of $100,000 or more) and low incomes ($25,000 or less) used cryptocurrencies more often than people in the middle-income brackets. Low-income Americans had the highest share of people using crypto for transactions (4%), while investing with crypto was most common among high-income Americans (8%).
Along racial and ethnic lines, 11% of Asian adults used cryptocurrency, compared to 9% of Hispanic adults, 8% of Black adults, and 6% of white adults.
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According to the Fed, the 7% of US adults who used crypto in 2023 was down from 10% in 2022 and 12% in 2021. Usage is decreasing both as an investment (from 11% to 7%) and as payment (from 2% to 1%).
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