Cryptocurrency craze in the times of Coronavirus: Who is behind the binge buying trend in the Bitcoin market?

Beginning of 2020 saw a sharp increase in trading of cryptocurrencies like Bitcoin and Ethereum. And this spike was maintained when the coronavirus pandemic crisis was at its peak from month of March through May.

A recent study by Cornerstone Advisors reveals that currently 15% of Americans own some form of cryptocurrency. This is more than half of first time investors during first half of 2020. On average, investment is almost $67.5 billion in this sector, which makes it around $4000 per person. With 15% holding of the cryptocurrency market by US, it holds the place in top ten countries with the market adoption, as per the data of September 2019. Though this has drastically changed during pandemic crisis.

So what demographic groups of people have been fueling the Bitcoin binge buying which has peaked during crisis.

High income and well educated sector: Studies reveal that almost 8 in 10 cryptocurrency buyer in 2020 are people in annual income averaging $130,000. Further 4 in 10 have a minimum master’s degree or higher education.

Millennial people and from Generation ‘X’: Studies indicate that millennials (age group of 26 to 40 years old) constitute 57% of Bitcoin consumers in 2020 and Generation X people (age group 41 to 55 years) form around 30%.

Bank of America customers: It was a surprising finding that 21% of cryptocurrency buyers mentioned their primary bank as Bank of America. During period of Bitcoin binge buy almost 47% of buyers were customers of Bank of America.

Cryptocurrency buying has proved to be boon for banks, Square for instance. Its Cash App for Q1 2020 through Bitcoin revenue accounted to $306 million. This has increased from Q1 2019 which was $65 million. Not surprisingly, PayPal is planning to offer cryptocurrency purchasing using its PayPal and Venmo applications. Currently many banks don’t permit their customers to purchase cryptocurrency using their bank cards. But as cryptocurrencies are entering the mainstream market, banks might have to reconsider their policies regarding allowing use of card and whether they should provide investment schemes related to cryptocurrencies.

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