(Kitco News) - It was a disastrous year for the cryptocurrency market as more than $2 trillion in value evaporated from the total crypto market cap, but that hasn’t dissuaded retail investors from investing and holding cryptos in the long run.
According to Accenture’s 2022 Global Consumer Payments report, one in five respondents claimed that they own cryptocurrencies, with 28% of that group indicating that they bought crypto as a long-term investment. Other reasons for purchasing crypto include curiosity (22%), short-term trading/speculation (21%), access to an alternative payment method (17%), and 12% said they use it for cross-border payments.
The survey included 16,000 customers in 13 countries across Asia, Europe, Latin America and North America in August and September 2022.
Based on the survey, payments are one of the fastest-growing avenues for crypto adoption as the use of digital wallets is on the rise. While traditional payment methods such as cash, debit and credit cards remain the dominant form of consumer payments, next-generation options like digital wallets and crypto are beginning to gain traction.
Currently, 9% of consumers indicated that they use next-gen payment methods as their primary way to pay for face-to-face transactions, but that number is projected to increase to 20% by 2025.
Adoption is especially high among consumers in the Asia-Pacific region who use digital wallets for small purchases at a higher rate than in other regions. Digital wallets are acting more as a bridge to the world of crypto, as 75% of them are linked to a credit or debit card and use traditional card rails.
A total of 56% of respondents use digital wallets more than five times a month versus 48% who said they use their credit cards that often.
Nearly a third (31%) of respondents who use credit cards as their primary payment method for in-person shopping are currently considering a change to other payment methods. Half would choose cash or debit cats in an effort to reduce interest expenses. At the same time, 9% said they would select a digital wallet and 4% chose crypto.
Regarding the use of central bank digital currencies (CBDCs), the report suggested that “a lack of standardization and the complexity of harmonizing regulations across jurisdictions may impede the usage of CBDCs for cross-border transactions.”
One surprising statistic showed that 38% of respondents would consider using next-gen payment methods such as ‘Buy now, pay later’ (BNPL) and crypto if they were provided through their main bank, due to the high level of trust in banking institutions. This offers banks an opportunity to remain relevant by providing solutions that level the playing field with new entrants.
And on the topic of the Metaverse, the survey found that “58% of consumers are afraid to transact in the metaverse as they don’t trust the payment providers. But 50% would be more comfortable transacting in the metaverse if their primary bank facilitated the transaction.” Only 23% of respondents said they trust crypto wallets to provide a secure environment for payments and purchasing.
The top frustrations voiced by survey participants – which are pushing them to explore alternative payment options – include slow transactions, failed payments and a lack of merchant support for their preferred payment options.
Bitcoin HODLers remain strong
Further evidence pointing to the increasing HODL nature of retail crypto investors was provided by Reflexivity Research founder William Clemente, who posted the following tweet highlighting that Glassnode data shows that the percentage of Bitcoin (BTC) held by retail traders has reached a record high of 17%.
The percentage of Bitcoin supply held by retail has soared to 17% this year.
— Will Clemente (@WClementeIII) December 20, 2022
Not perfect yet, but solid for a 12-year-old asset and definitely trending in the right direction.
Bitcoin's supply disperses over time, while Fiat's holder base concentrates to whales over time. pic.twitter.com/ipDbWVmcEl
Digging into the data a little further, the long-term hodler supply – defined as holding form more than 180 days – also hit a new record high of 13.9 million BTC this month, which is roughly equivalent to 72.3% of the total circulating supply. These metrics indicate that confidence in the long-term outlook for Bitcoin remains high despite the upheaval of 2022.
