The number of cryptocurrency users fell by 50 %

A Bank of America report shows that in recent months, the number of cryptocurrency users has decreased by 50 %.

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The bear market caused a significant drop in active cryptocurrency users

The collapse of the crypto market in these first six months of 2022 in the range of 60/70 % drastically reduced the number of active users of digital currencies, which fell by a whopping 50 %.

At least that's what a newly released Bank of America report says, which only applies to the bank's clients. The bank's cryptocurrency users fell to less than 500,000 in May from more than 1 million in November 2021, when Bitcoin and some other tokens hit all-time highs.

According to Bank of America analysts, this trend has been accelerated by the collapse of the Terra ecosystem and the Fed's restrictive policy, which could affect further declines in the cryptocurrency market. Moreover, in their opinion, the constant rise of the dollar will negatively affect only risky assets, which include Bitcoin and other cryptocurrencies.

In a report, the Bank of America Institute team wrote:

“Crypto markets have been rocked by the sharp decline in digital currency prices and the collapse of some stablecoins.

The bank's report analyzed all the movements of clients who invested in cryptocurrencies. Although the data is partial and does not reflect the amounts invested, the results showed this strong downward trend.

Investors are losing faith in cryptocurrencies

In April and June, roughly 30 % bank clients stated that they did not invest in cryptocurrencies and did not plan to do so in the future. Analysts say that the negative sentiment towards cryptocurrencies on the part of its customers must therefore have increased.

However, the trend seems to be general, especially after the collapse of Terra and its stablecoin, which has certainly created a distrust of many crypto companies, which many believe could follow the same path.

Bertrand Perez, CEO of the Web3 Foundation, said this at the World Economic Forum in Davos, Switzerland.

“One of the implications of what we've seen with the Terra issue is that we're at a stage where there are basically too many blockchains, too many tokens. And this also brings certain risks for the user”.

Scott Minerd, Chief Investment Officer at Guggenheim, openly claims that most cryptocurrencies are "trash" but that Bitcoin and Ethereum will survive. Ripple CEO Brad Garlinghouse also claimed that only a few hundred cryptocurrencies will remain alive in the future, adding:

“I think the question is whether we need 19,000 new currencies today or not. There are maybe 180 currencies in the fiat world.”

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All content in this article is for informational purposes only and does not in any way serve as investment advice. Investing in cryptocurrencies, commodities and stocks is very risky and can lead to capital losses.