By
Bhushan Akolkar
April 17th, 2024
The 2021 Fed well-being report sheds light on how different economic classes in the US treated crypto within the past year.
According to a recent report by the US Federal Reserve, American households tend to favor crypto more for investments than as a medium of exchange. The annual Fed Economic Well-Being of US Households in 2021 report includes crypto for the first time and draws from the Fed Board’s ninth annual Survey of Household Economics and Decision-making which circulated in October and November last year.
The crypto information in the report revealed key findings. For instance, it showed that 12% of surveyed adults possessed or used digital currencies last year. In addition, the Fed crypto report also revealed that only 2% of adults deployed crypto for purchases, while 1% sent it as money to family and friends.
Furthermore, the report also stated that adults from lower-income households tend to use crypto for transactions. However, as many as 13% of this group did not have traditional bank accounts, while 27% had no credit cards. Also, the Fed’s crypto findings concluded that 60% of adults who used crypto for transactional purposes had an income less than $50,000. Conversely, only 24% had earning power that exceeded $100,000 monthly.
The document described the group that held crypto for investment purposes as “disproportionately high-income, almost always had a traditional banking relationship, and typically had other retirement savings”. In addition, 46% earn a minimum of $100K, while 29% are in the under $50K bracket. Lastly, virtually all adults surveyed in the crypto investment group (99%) operated a bank account.
Other Takeaways from the Fed Crypto Report
The Fed report also included details about overall financial well-being. Here, data showed an increase in adults faring moderately well financially in Q4 2021 as opposed to 2020.
Furthermore, the report also indicated that the level of self-reported financial well-being was at a record high since the survey’s inception in 2013.
Meanwhile, on the employment front, the report stated:
“Many people switched jobs in 2021, and those who did generally said that their new job was better than their old one.”
Touching on the pandemic and how it influenced the workplace, the Fed document said:
“Most employees also said that their employer was taking about the right amount of COVID-19 precautions, although some people not working indicated that concerns about the virus contributed to the choice not to work.”
This research took place before the Omicron variant surge happened last year. As a result, the U.S. central bank admitted that some of the specified outcomes may have been different if the research had occurred later.
Other categories covered extensively in the annual report include “Dealing with Unexpected Expenses,” “Banking and Credit,” “Housing,” “Education,” and “Student Loans.”
Other Important Fed-related News
The Fed has been dealing with rising inflation for several weeks. In a bid to contain the predicament, the central bank has been raising interest rates consistently. Fed Chair Jerome Powell has expressly said that inflation is at its peak.