The Bank of Canada (BoC) reported a decline in the ownership of Bitcoin (BTC) and cryptocurrencies in the country in 2022, as neither market conditions nor regulations sided in favor of Canadian crypto investors, according to a BoC study published on July 26.
The study includes data from the annual Bitcoin Omnibus Survey conducted by the Canadian central bank, which showed a relapse from the massive crypto adoption witnessed in 2021.
The above graph shows that Bitcoin ownership in Canada declined to 9% by August 2022. However, BTC adoption saw a slight uptick to 10% by the end of the year, and the drop in Bitcoin ownership does not imply that investors were spreading out their investments into other cryptocurrencies. The report read:
“Investors did not appear to shift out of Bitcoin and into other cryptoassets, as we observe decreased ownership of altcoins.”
The biggest motivation for Canadians interested in Bitcoin is as an investment, according to over one-third of the 4,996 respondents in the Bank of Canada’s 2022 survey.
Most Canadians acquired their crypto holdings through mobile and web apps. Bitcoin and crypto mining became the third-most-popular method of accumulating tokens for the second consecutive year.
When it comes to the altcoin ecosystem, Dogecoin (DOGE) was the most sought-after crypto investment considering the Elon Musk-induced hype and its history of randomly skyrocketing in price. Ether (ETH), Bitcoin Cash (BCH) and Litecoin (LTC) were some of the other popular altcoins among Canadians.
According to the BoC, the research is relevant for monitoring the two conditions that could warrant the issuance of an in-house central bank digital currency (CBDC): “if Canadians almost or do stop using cash, or if Canadians widely adopt and use private cryptocurrencies for payments.”
The BoC highlighted that ecosystem collapses, regulatory hurdles and price depreciation contributed to the decline in crypto ownership. However, considering the government’s intent to provide regulatory clarity combined with a stable market, crypto ownership in the region is expected to pick up.