Lower income investors are selling their cryptocurrencies, why?

Crypto markets have had one of the worst weeks of the year. Bitcoin, the primary cryptocurrency, had its worst quarter in Q2 2022. The crash also saw the collapse of many major crypto firms. However, a new report from Civic Science found that most investors are still holding on, regardless of the market's decline.

Civic Science reports that a quarter of the general population has invested in cryptocurrencies and 71 % surveyed have not invested in the emerging asset class. 54 % individuals who held cryptocurrencies did not sell any of their holdings and 20 % said they sold a small amount, while 26 % said they sold all or most of their holdings.

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Lower-income investors were more short-selling, the report said. This is no surprise as wealthier investors have the means to weather the storm.

The crypto market crash affected lower income investors the most

The report states that 7 % has been negatively affected by the current market situation. While 14 % claimed to know people affected by the same. 78 % said they were not affected by the market downturn.

Thus, the report shows that the crash hit lower-income individuals the hardest. However, higher income individuals have a safety net, such as insurance against downturns and inflation. On the other hand, lower income individuals need to monetize their investments to survive.

This is in line with a report by the European Central Bank, which found that families with lower and higher incomes were more open to crypto investments, while middle-income families were the most skeptical.

In addition, the report found that some have not invested in cryptocurrencies due to a perceived lack of legitimacy. Another reason was the volatility of cryptocurrencies followed by lack of knowledge.

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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.