Income Impacts How Consumers Use Crypto, Fed Report Says

Only 3% of US adults reported using crypto for purchases or money transfers, and they are most often lower income earners


Blockworks exclusive art by axel rangel


key takeaways

  • Fed report shows that people who use crypto for transactions are twice as likely to be unbanked
  • Higher income earners are more likely to use crypto as an investment tool

While cryptocurrencies are used as an investment tool “far more” often than as a means of payment, how digital asset holders think about tokens comes down to their income level, the Federal Reserve said in a recent report. 

Twelve percent of adults in the US reported holding digital assets and 3% reported using crypto for purchases or money transfers, according to the Fed’s Economic Well Being of US Households (SHED) report.

In 2021, almost 60% of adults who used cryptocurrencies for transactions had an annual income of $50,000 or less, the Fed said in the report, while 24% of transactional users reported an annual income of $100,000 or less. 

These users are also disproportionately unbanked, the Fed said. Lower income adults are less likely to have a traditional banking relationship, but transactional crypto users were found to be twice as likely to be unbanked as peers in the same income bracket.

Source: Federal Reserve

Among the respondents, 27% of people using crypto transactionally report they don’t have a credit card, the Fed noted, compared with 17% of non-crypto users. 

The report might help advance crypto policy in Washington, some speculate, as it shows a legitimate use case for digital assets. 

“[It’s] great news as it relates to the House Financial Services Committee that met late last year, which emphasized, on a bipartisan basis, that crypto could help the unbanked and democratize the banking system,” David Tawil, president of crypto hedge fund firm ProChain Capital, said.

“The fact is that crypto cannot be ignored and serves the public well; especially that part of the public that is shut out of the traditional banking system.”

On the other hand, those who hold cryptocurrency purely for investment purposes are disproportionately high-income, the Fed said. These investors also almost always have a traditional banking relationship and other retirement savings vehicles in addition to their crypto holdings, the report noted. 

In 2021, 46% of those using cryptocurrencies only for investment had an income of $100,000 or more, while 29% had an income under $50,000.

Don’t miss the next big story – join our free daily newsletter.


Upcoming Events

Hilton Metropole | 225 Edgware Rd, London

Mon - Wed, March 18 - 20, 2024

Crypto’s premier institutional conference returns to London in March 2024. The DAS: London Experience: Attend expert-led panel discussions and fireside chats Hear the latest developments regarding the crypto and digital asset regulatory environment directly from policymakers and experts.

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Top Icon.png


Osmosis thrived in H2 2023 on the back of increased DeFi activity deriving from recently launched Cosmos-related projects and better market conditions. With new value accrual mechanisms for the native token, Osmosis is well-positioned to continue its strong performance in 2024.



Do Kwon may miss the start of the March 25 trial in the SEC’s case against the former executive and Terraform Labs


Riot Platforms bought 31,500 more mining machines while CleanSpark has begun operating in Mississippi


Dencun was activated on all testnets, a blog post Tuesday said


Hut 8 also announced it broke ground on a Texas mining site


Uniswap aims to become a “complete platform for swapping” following its latest product releases


Continued demand for bitcoin ETFs coupled with greater demand for bitcoin from exchanges is contributing to price moves, analysts say