A research report released by the Bank of Canada on July 26 has indicated a decline in Bitcoin ownership in the country. The report suggests that the cryptocurrency market in Canada might face challenges in 2022 due to unfavorable market conditions and regulatory constraints, impact ing cryptocurrency investor sentiment.
The study analyzed data from the Bank of Canada's annual Bitcoin Omnibus Survey, which revealed a surge in widespread cryptocurrency adoption in 2021. However, the research illustrates that Bitcoin ownership in Canada dropped to 9% by August 2022. Despite this decrease, there was a slight recovery to 10% by the year's end. Interestingly, the decline in Bitcoin ownership did not translate into a shift towards diversification into other cryptocurrencies, as the report notes: "Investors do not appear to be moving away from Bitcoin to other cryptoassets as we observe a decrease in altcoin ownership."
The survey, which had over 4,996 respondents, highlighted that a significant portion of Canadians were motivated to engage with Bitcoin as an investment, indicating a strong investment sentiment. Most Canadians acquired their cryptocurrencies through mobile and web applications. Cryptocurrency mining, particularly of Bitcoin, was identified as the third most popular method of accumulating coins for the second consecutive year.
Within the altcoin realm, dogecoin emerged as a favored cryptocurrency investment due to the media attention it received from figures like Elon Musk and its history of sudden price surges. Other altcoins such as ether, Bitcoin Cash (BCH), and Litecoin also enjoyed popularity among Canadians.
The report from the Bank of Canada examines conditions that might lead to the issuance of a central bank digital currency (CBDC), emphasizing the decline in cryptocurrency ownership due to factors like ecosystem instability, regulatory challenges, and price volatility. However, with the anticipation Of clearer regulations and a more stable market environment, the report anticipates that cryptocurrency ownership in Canada will likely rebound.
