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The cryptocurrency market has witnessed a sharp correction over the past few weeks. The correction stems from a selloff triggered by investors spooked by various developments, such as the recent halt of services on the Celsius protocol. However, despite the negative price action, a recent survey from Bank of America estimated that consumer interest in digital assets was still strong. This shows that new buyers are still entering the market despite fearing a further recession.
Bank of America says consumers are interested in crypto
Bank of America recently conducted a survey that involved 1000 existing and potential future users of the cryptocurrency market and the entire digital asset market. In the US, past surveys have shown that the level of cryptocurrency adoption is at its peak, and the recent survey by the Bank of America could be proof of this.
The survey showed that 91% of the respondents wanted to buy crypto over the next six months. This is a similar percentage to those who said they had bought the asset during the past six months.
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Despite the current price decline, the survey also showed that a significant number of people were not willing to sell their cryptocurrencies. Those who were not willing to sell their holdings during the next six months accounted for 30% of the survey respondents.
The same percentage also said they had not sold cryptocurrency during the past six months. The average cryptocurrency transaction also varied in size. The amount of crypto buys was larger than the crypto sales. The most popular crypto transaction size was below $25.
The survey also looked at the platforms the traders used most to interact with digital assets. The platforms that were most used by cryptocurrency traders include PayPal and Coinbase. Coinbase is one of the largest cryptocurrency exchanges in the US. On the other hand, as a leading fintech, PayPal has positioned itself as a leading player in the cryptocurrency sector.
The bank also said that cryptocurrency use as a means of payment was increasing significantly. 39% of the survey respondents said they would use crypto as a payment method for online purchases, while 34% said they would use crypto for in-person purchases.
While cryptocurrency use was rising, it did not account for the largest share of investment portfolios. According to the survey results, crypto accounted for below 10% of the investment portfolio of 65% of the respondents. However, the crypto allocations also varied. 15% of the respondents held over 25% of their entire investment portfolio in digital assets.
The majority of the respondents in the survey were short-term investors. These investors had held cryptocurrencies for less than one year. Short-term crypto trading is popular because of the market’s volatility, where short-term price movements can be significant.
Crypto market crash
The cryptocurrency market has suffered from one of the worst crashes in history. The global cryptocurrency market cap has dropped to around $930 billion. This is a massive decline from the over $3 trillion market cap reported in November last year.
Bitcoin has been a victim of this crash, dropping nearly 70% from its ATH of $69,000. At the time of writing, Bitcoin was trading at $21,990, according to CoinMarketCap. Ethereum is also trading below $1200.
The decline has been attributed to several factors. One includes the recent metrics showing the rising level of inflation. The other reason is the recent announcement by Celsius that it would halt withdrawals because of the market conditions. This announcement spooked the market as people feared another Terra Luna incident.
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