Cryptocurrency ownership in Canada declined in 2022 due to a plethora of factors including uncertainty in regulation, fear of digital asset scams, and unfavorable market conditions.
A new survey, the Bitcoin Omnibus Survey (BTCOS) by the Bank of Canada highlights the trend of digital assets in the country from an analysis involving 4,996 participants.
According to the survey, Bitcoin (BTC) ownership declined by 10% across multiple categories of holders from the previous year with slight fluctuations influenced by the market.
The decline becomes glaring when compared to previous years. The BTCOS shows that in 2021 BTC ownership spiked by 13%, an upward growth of 3% from previous years.
While the decline was at a high in August following the crash of the Terra network, adoption slightly increased towards the end of the year as optimism for the new year grew.
The drop in BTC ownership does not signify a shift in the asset to other cryptocurrencies as participants revealed that they did not spread to other assets including DeFI.
“Investors did not appear to shift out of Bitcoin and into other crypto assets, as we observe decreased ownership of altcoins.”
In addition, the survey points to the fact that among altcoins Dogecoin (DOGE) led the pack due to the previous influence of Elon Musk on the price of the asset.
DOGE popularity in Canada peaked as speculation about Musk’s acquisition of the social networking site Twitter grew. The deal and the projected DOGE integration on Twitter further increased its popularity among Canadians.
Other altcoins that surged in popularity include Ethereum (ETH), Litecoin (LTC), and Bitcoin Cash.
Market forces led to the plunge
Digital assets experienced the harsh winter for a greater part of 2022 across various market players ranging from miners, traders, and executives.
The fall in prices was recorded across the board with several assets losing over 50% of their value.
Market leader Bitcoin lost over 55% of its market cap last year although the asset has gained lost brood following positives recorded this year.
Crypto prices remained in the woods last year following infamous incidents that plagued the section including the crash of the Terra network in April that wiped an estimated $60 billion from the market.
The implosion of FTX in November further reduced investor confidence after the illegal activities of former CEO Sam Bankman-Fried and sister company Alameda Research were revealed.
Regulatory authorities further added to the woes of the market as the slow-paced legislation led to the vague application of existing law by financial regulators on digital assets.
The report shows that a majority of Canadians acquire Bitcoin and other crypto assets for investment purposes rather than as a means of exchange.
The report highlighted the acceptance of Central Bank Digital Currencies (CBDC) compared with private coins for payments in the future.
“if Canadians almost or do stop using cash, or if Canadians widely adopt and use private cryptocurrencies for payments.”