Analyst company Morning Consult has released a report, Tracking Cryptocurrency Adoption and Perspectives. Data for the analysis was collected quarterly in 2022 and are weighted to approximate a representative sample of U.S. adults. In the article, we break down some of the conclusions of the analysis and provide our insights. TLDR Ideology has not triumphed over technology. People have confidence in multiple projects. ADA is held by 4% of Americans. That's 18% of people who hold any cryptocurrency. Blockchain technology is understood by 24% of Americans. However, only 15% hold Bitcoin. 29% of millennials hold Bitcoin and probably other cryptocurrencies. People holding cryptocurrencies are looking for alternative financial services and are more willing to use DeFi. Which projects do people trust the most? 19% of Americans hold some kind of cryptocurrency. Cardano is one of the 10 projects analysts asked about. At the end of 2022, 15% of Americans held Bitcoin, 10% Ethereum, and 4% Cardano. There are over 330 million people in the USA. This would mean that ADA is held by around 13 million people in the US alone. In the case of Bitcoin, that's 50 million people. Those are very positive numbers. If this is indeed the case, it should be pointed out that most people probably hold cryptocurrencies on centralized exchanges. From on-chain data, we know that around 1.2 million people around the world stake ADA from their own Cardano wallets. What percentage of Americans stake ADA out of their own wallets? By the numbers, it would have to be a very small number of them. It is important to continue to teach people to use their own wallets. This applies to all cryptocurrencies. It seems to us that something may not be right, but we don't want to question the report. Let's move on. Analysts also asked about stablecoins. USDC is held by 7% and USDT by 4% of people. It is safe to say that 2/3 of the people who hold Bitcoin also hold some stablecoin. It is positive that people are using tokenized dollars as this may be one way to increase the use of payments via cryptocurrency assets. Stablecoins are one of the biggest use cases of smart contract platforms today. First of all, it must be said that Cardano is doing very well. Even though the project had roots in 2015, people could buy ADA on a public exchange at the end of 2017. Ethereum has had smart contracts for much longer, so it is evident that the network effect is much larger. It should be mentioned that Solana also reached 4% and Polkadot reached 3%. So Cardano is not the only younger smart contract platform on people's radar. In a broader context, it's good to note the fact that most people in the US are not Bitcoin maximalists. ⅔ of the people who hold Bitcoin also hold Ethereum and possibly other projects. Bitcoin maximalists are a noisy and toxic group that certainly influences people's opinions. However, the data shows that the influence of the maximalists is not as strong as we may sometimes think. The data can be interpreted to mean that people don't believe in a single project that should win it all. For various reasons, they have confidence in multiple projects. Ideology has not triumphed over technology. Utility and direct network effect are what determine success. Very positive for Cardano is the share of cryptocurrency owners who said they had sold a cryptocurrency in the last month. Holders responded that 11% sold ADA at the beginning of the year and only 10% at the end of the year. This could be interpreted as people trusting the project in the long term. For all other blockchain projects, it was the opposite. People sold more of them at the end of the year than at the beginning. For example, Bitcoin was sold by 27% of holders in January, and 37% in October. In general, and perhaps surprisingly, people sell the biggest Bitcoin and Ethereum projects the most, and other projects tend not to sell. People were almost 4 times more likely to sell BTC than ADA at the end of the year. We believe that some people don't sell ADA during a bear market because they use staking. This is very important in the context of network security and decentralization. A more detailed version of the report shows that of all cryptocurrency holders, Bitcoin holds 75% and Ethereum 49%. In the case of Cardano, it is 18%. The young generation will drive the adoption About 29% of millennials and about 23% of Gen Z participants surveyed in October 2022 said they own Bitcoin. For millennials, it's almost double the average. The younger generation will drive adoption in the coming years. Cryptocurrency adoption may reach up to 50% in these groups in the coming years. Analysts have not disclosed what other cryptocurrencies the younger generation holds. We estimate that young people will try DeFi services more than the older generation. The older generation tends to be more conservative and will therefore mainly hold the largest cryptocurrencies. The younger generation is more curious and more adept at using new technologies. We, therefore, estimate that among the younger generation, there will be many who hold other cryptocurrencies, try using DeFi and also own NFT. Generation Z and millennials are the most active groups when it comes to climate and sustainable development. Other research shows that 71% of millennials and 61% of Gen Zers consider the environment a top priority. This can be an advantage for Cardano and other PoS projects. How do people understand and use cryptocurrencies? Interesting is the share of people who are very or somewhat familiar with cryptocurrency topics. Despite the fact that 2022 was largely a bear market, people's awareness of NFTs rose from 22% to 28% during the year. DeFi also performed well. Awareness of it grew from 17% to 21%. At the end of the year, 24% of respondents understood blockchain. This figure is interesting in the context of the number of cryptocurrency holders. While nearly 25% of Americans understand blockchain, only 15% of them hold Bitcoin. This can be interpreted to mean that despite understanding the technology, a portion of people is not interested in holding it. Not everyone who has ever driven a car or knows how it works necessarily owns one. That's just the reality. Those who already understand the technology can more easily adopt it later if they find a reason to do so. The important thing is that they already have some knowledge and can share it. Moreover, it is easier for these people to follow the blockchain industry. On a positive note, nearly a fifth of Americans has some idea that DeFi exists. People's knowledge doesn't stop at blockchain. They are watching other areas. This is very positive in the context of Cardano. Probably because of the FTX bankruptcy, the number of people who think that the blockchain industry should be more regulated compared to the traditional financial world has increased. Analysts asked people whether they considered cryptocurrencies beneficial or harmful to society. Back at the beginning of the year 2022, the difference between the two groups was only 1%. The prevailing opinion was that cryptocurrencies are harmful. This has changed over the course of the year and the number of skeptics is now 7% higher than those who still consider cryptocurrencies beneficial. Most people who have said they understand cryptocurrencies very likely understand that the bankruptcy of FTX and other centralized services is a failure of CEOs and managements. It's important to keep repeating that blockchain, and by extension DeFi, is the solution to the problems associated with CeFi. Cryptocurrency owners are more likely to use alternative financial services such as nonbank check cashing and payday loans. These services are typically used by the underbanked. Cryptocurrency owners are almost three times more likely to send remittances than the general population. It is 23% versus 8%. They are also more than twice as likely to use check-cashing services. Cryptocurrency owners are willing to use alternative financial services and that includes those over the blockchain. We've written several articles about the need for people to use blockchain and not just hold coins. It turns out that alternative financial services like remittances and loans are getting interested from users. Cardano is a global financial operating system built just for these users. However, the number of people who hold cryptocurrencies just to get rich is still the highest and this group makes up 66%. Only 16% of people hold cryptocurrencies for the ability to send money or pay with them. Data on whether people use stablecoins or volatile cryptocurrencies is not in the analysis. 18% of people hold cryptocurrencies for both of these reasons meaning they want to make money and use cryptocurrencies. Conclusion The report covered only the US. Other sources suggest that about 10-15% of the population worldwide holds cryptocurrencies. There are countries where adoption is higher than in the US, such as Thailand, Nigeria, South Africa, and Turkey. Different analyses give different numbers. It is very positive that a portion of cryptocurrency holders are interested in using alternative services. They understand DeFi and want to use it. Similarly, there is a lot of interest in NFT. There are services being created on Cardano that are in demand in one of the most economically important countries in the world. There is even more interest in cryptocurrencies in developing countries where people need to use more than just hold them. Everything is going in a good direction and Cardano will definitely be one of the projects that have a chance to achieve a high adoption rate.
