Family Finances

Crypto Winter: Myth or Reality? A look at individuals who use cryptocurrencies shows many remain invested

April 4, 2023  • Mack Wallace, David Derryck, Shehryar Nabi & Sheida Isabel Elmi

The 2022 Super Bowl showcased the arrival of cryptocurrencies, with four nationally televised ads worth $38 million introducing viewers to various cryptocurrency companies. Further, the addition of popular cryptocurrencies like Bitcoin and Ethereum to Block’s CashApp and PayPal’s Venmo and PayPal apps made the cryptocurrency ecosystem more accessible than ever before – more than 57% of Americans now had access to cryptocurrency through apps they already use their smartphone, according to Pew Research

However, the last year has been tumultuous for cryptocurrencies. The collapse of TerraLuna in May 2022 was followed by the implosion of other exchanges like FTX, which resulted in a chain reaction that affected BlockFi, Genesis, and Celsius in the fall of 2022. According to CoinGecko, this led to a significant fall in the asset value of cryptocurrencies from $3 trillion to less than $1 trillion at the end of 2022.

This precipitous drop has led to two clear camps within institutional finance: cryptocurrency critics and cryptocurrency bulls. While the vice chairman of Berkshire Hathaway, Charlie Munger, is in the former camp, calling for the ban of all cryptocurrencies in a Wall Street Journal Op-Ed, many like Larry Fink, who leads BlackRock, the world’s largest asset manager, remain bullish on the potential benefits of digital assets as shared in his Annual Letter to Investors.

Amid the turbulence of the cryptocurrency market, what do people using cryptocurrencies really think? Here at the Aspen Institute Financial Security Program, we conducted 10 in-depth interviews with economically-, racially-, and geographically-diverse research participants from November 10th to December 5th of 2022 in our quest to understand the relationship between cryptocurrency and financial well-being. We worked with nonprofit SaverLife to identify 10 individuals within their membership community who also have Coinbase accounts to participate in the research. We asked what led them to use cryptocurrency, their financial goals, their investing experiences, and how recent events may have impacted their behavior. Here are the main themes we discovered: 


Key Findings from In-Depth Interviews on Cryptocurrency
Investment Opportunity:
  • Most research participants view cryptocurrency as a high-reward investment with high risk
  • Participants see cryptocurrency as one aspect of a diverse portfolio of investments 
  • Cryptocurrency appeals to participants for its ease of use and as a more accessible alternative to traditional finance for investors of color
Self-Perception and Attitudes:
  • Research participants consider themselves above-average risk takers 
  • They see themselves as participating in a new, decentralized system that will provide societal benefits
Beliefs Encountered:
  • Research participants enjoyed the decentralized aspect of cryptocurrency as it allows for direct access to their money
  • Greater education and more regulation are desirable, but the aim should be to prevent fraudulent activity while retaining the benefits of the cryptocurrency ecosystem


Excitement and the prospect of making money were two big motivators for investing in cryptocurrency 

Many of the research participants describe investing in cryptocurrency in emotional terms. They enjoy the excitement of investing due to its riskiness and its novelty, following a trend, and not wanting to miss out. One participant said:

“I liked the risky aspect of it – I didn’t have other things that had such a huge potential . . . I don’t like being boring and crypto is anything but.”

Although most participants invested purely to make more money for its own sake, some were open to changing this in the future and using their investments toward a specific goal, such as retirement. Most of the people we spoke to about cryptocurrencies regard them as a new and exciting investment, with its riskiness being an attractive aspect.

However, these participants see cryptocurrency as a small and declining share of their overall portfolio of investable assets. They tend to invest in small amounts, and no one had more than 15% of their portfolio invested in cryptocurrency. Most had previously invested a greater share of their portfolios (one person invested as much as 40%), but withdrew funds after seeing their value decline. 

Further, these participants see investing in cryptocurrency as a way to further diversify their investment portfolios. A level of 15% or less in diversification with our participants is consistent with diversification levels from nationwide surveys: a JPMC analysis found the median person had invested less than 1 week’s worth of take-home pay, or $620, in cryptocurrency cumulatively between 2015 and 2022.

‘Risk taking’ and the potential to help deliver ‘social benefits’ were two key attitudes that emerged from interviews 

Research participants describe themselves as risk-takers with higher-than-average self-rated financial risk. The average self-rated financial risk was 7 out of 10 for our sample, as compared to the national average of 4.2 (Survey of Household Economic Decisionmaking, 2021).

Some participants also expressed support for the social benefits of cryptocurrency, as it eliminates the “middle man.” They criticized traditional financial institutions for restricting access to their money, charging unfair rates for their services, and imposing exorbitant penalties such as overdraft fees; they believe that cryptocurrency’s decentralized nature empowers the everyday person. One participant said:

“I find that banks are constantly involved in taking money–basically being the middle man for infrastructure that has been established. Over time as their expenses go down, they don’t lower prices or they raise them. I feel like with cryptocurrency there isn’t as much of that middle man. It feels like more of an efficient way to transmit money. I see that as a benefit.”

Research participants praise cryptocurrencies for their ease of use, with one noting that it broke barriers to traditional finance faced by Black investors. However, more education is desired.

The user experience, accessibility, and the ease of buying or selling cryptocurrency were cited as some of the best features. Participants noted the comparatively low amount of money required to get started and how user-friendly the platforms were given 24/7 trading and easy, fast on- and off-ramps to deposit and withdraw funds. This accessibility has led to broad-based usage of cryptocurrencies: about one-in-six US adults have now used cryptocurrency according to Pew Research. One participant had this to say:

“It is easy, you can buy and sell whenever and with some platforms you put in the money and have it right away to invest.”

In particular, one Black participant commented that cryptocurrencies felt more accessible to them than traditional finance:

“Crypto feels like nobody’s going to get left behind. Stocks and things don’t feel like me, as an African American woman, I was educated on those things. So getting into crypto gave me the confidence to start investing and realize I could do things that others were doing with traditional finance.” 

Nationally, we observe higher rates of cryptocurrency usage among adults of color. According to a 2021 report by the Kansas City Fed, by race Black adults showed higher rates of cryptocurrency usage than white and Hispanic adults and had higher rates of cryptocurrency participation relative to traditional investment products like stock or mutual fund ownership. JPMC’s December 2022 report also suggests higher participation among diverse adults: Asian adults have the highest participation rate at 27% followed by Black and Hispanic adults at 21% and white adults at 20%. 

While cryptocurrency in general is seen as easy and accessible, participants desired more and better education. In particular, participants found aspects of cryptocurrency such as investment strategies, how to distinguish between safe vs. risky applications, and the terminologies associated to be difficult to understand.

The Crystal Ball: Research participants believe cryptocurrency is here to stay, though with more regulatory safeguards

When asked about recent news headlines and market turmoil, the outlook ranged from cautious to unconcerned. Participants remain hopeful that cryptocurrency values will eventually improve and were open to investing more when that happened. Some participants are undeterred by market volatility – either because they hold cryptocurrency as a short-term investment and had not incurred large losses from a buy-and-hold strategy, or because they viewed the recent downturn in the context of a business cycle that would inevitably turn around. This is consistent with evidence suggesting that, globally, cryptocurrency usage has been resilient to last year’s shocks.

Regarding regulation, participants desired a balanced approach: one that protects consumers against predatory actors like scammers and against losses caused by the insolvency of cryptocurrency exchanges. However, participants are hesitant to support more intrusive regulations that could remove features of cryptocurrency that make it appealing. One participant said:

“I would love to see regulation for shady characters. Obviously people who get hurt are those who can’t afford it. I haven’t given much thought to be honest as to [which regulator]. Control by the government removes a lot of the benefit.”

The current ‘crypto winter’ has dimmed the euphoria of cryptocurrencies among some investors and led to a fierce debate between cryptocurrency critics and cryptocurrency bulls on its future. But despite the unsettled question of cryptocurrency’s sustainability, many of those we spoke to remain invested.

Want to learn more about blockchain, cryptocurrencies, and its implications on household financial security? Read Blockchain, Crypto, and Household Financial Security: An Introductory Guide for Policymakers and Social Sector Leaders.

Family Finances
Blockchain, Crypto and Household Financial Security: An Introductory Guide for Policymakers and the Social Sector
April 4, 2023 • David Derryck & 1 more