As mentioned in the Bank of Canada’s Financial System Review, cryptoasset markets have been growing rapidly in recent years and have become somewhat more integrated into the traditional financial system. The most well-known cryptoasset is Bitcoin, which launched in January 2009. The Bank has been studying Bitcoin since 2016, using surveys to understand Canadians’ relationship with this cryptoasset. The results of the 2021 Bitcoin Omnibus Survey, like the results of previous editions of the survey, provide a wealth of information on the extent to which Canadians are aware of, own and use Bitcoin. The survey results also provide some comparable information on alternative digital currencies. Here are five takeaways from this survey:
1. Bitcoin ownership among Canadians increased sharply in 2021
The share of Canadians owning Bitcoin rose from 5% in 2018–20 to 13% in 2021 (Chart 1). This increase occurred following widespread increases in the savings and wealth of Canadians during the pandemic. At the same time, some fintech companies began to offer cryptocurrencies alongside traditional investment products, providing consumers with a wider range of accessible and user-friendly platforms to buy Bitcoin. The results of the survey also revealed that Bitcoin purchasers in 2020 and 2021 relied increasingly on mobile apps to buy their Bitcoin. Purchasers used mobile apps much more than web-based exchanges, mining or visiting a Bitcoin ATM.
Chart 1: Ownership of Bitcoin jumped in 2021
Source: Bank of CanadaLast observation: 2021
2. Most Canadians are aware of Bitcoin
Like in previous years, about 90% of Canadians in 2021 had heard of the term Bitcoin. Investigating further, we surveyed respondents on their level of understanding of how Bitcoin works. For instance, we asked them whether they agreed with the statement that Bitcoin is backed by a government (which is false). Based on the answers to three such core questions, we found that 40% of Bitcoin owners in 2021 showed a low level of Bitcoin knowledge, which is a higher percentage than in previous years (Chart 2). Also, 66% of Canadians who did not own Bitcoin showed a low level of understanding of how this cryptoasset works.
Chart 2: Among Bitcoin owners in 2021, 40% showed a low level of understanding of how Bitcoin works
Source: Bank of CanadaLast observation: 2021
3. Investment reasons have largely driven the recent surge in Bitcoin ownership
The survey asked owners of Bitcoin when they first bought this cryptoasset. Those who purchased Bitcoin in 2020 or 2021 accounted for about half of all owners in 2021. These recent owners are even more likely than earlier adopters to view Bitcoin as an investment vehicle (Chart 3).
Chart 3: Investment is the main motivation for Bitcoin owners
Note: Recent owners first bought Bitcoin in 2020 or 2021, while long-term owners bought Bitcoin before 2020.
Source: Bank of CanadaLast observation: 2021
4. Most Bitcoin owners hold small amounts
In 2021, the median amount of Bitcoin held was Can$500 worth, and 70% of Bitcoin owners held the equivalent of Can$5,000 or less. The value of Bitcoin holdings is higher for long-term owners than recent owners (Chart 4) because long-term owners benefited from the significant run-up in prices that occurred during 2020.
Chart 4: The median value of Bitcoin holdings was Can$500 in 2021
Note: Recent owners first bought Bitcoin in 2020 or 2021, while long-term owners bought Bitcoin before 2020.
Source: Bank of CanadaLast observation: 2021
5. Large price corrections are the most common incident reported by cryptoasset owners
In 2021, 25% of cryptoasset owners reported that their holdings had at some point lost significant value in a price crash (Chart 5), up from 18% in 2019. Other adverse incidents faced by owners of cryptoassets include losing access to their wallet (11%), encountering a problem with a cryptocurrency transaction (9%) or stolen funds (7%).
Chart 5: One-quarter of cryptoasset owners reported having experienced a price crash
Source: Bank of CanadaLast observation: 2021