Who Wants Cryptocurrency in the Future and Why?

Abstract

This study investigates the factors that make people want to hold cryptocurrency. A wide range of possible determinants of demand is considered. Data for this study come from an online survey in the U.S. Econometric analyses help to quantify the relative importance of drivers of demand for cryptocurrency. Survey respondents will more likely hold cryptocurrency in the future the more they expect cryptocurrency to replace government money, to increase transparency in monetary affairs, and to yield high profits. Further, demand is driven by the anticipation that non-monetary uses of the blockchain technology will have a spillover effect on the Bitcoin price. By contrast, subjective expectations of a crypto-induced financial crisis dampen demand. The data shows that differences in the future demand among people with and without prior holdings of cryptocurrency largely stem from differences in their expectations. By relating individuals’ attitudes to their plans, the present approach offers more insights than the mere attitude surveys already available.