Crypto is Coming Back, but Not Like Headlines Make You Believe

Many cryptocurrency enthusiasts greeted President Donald Trump’s November victory with optimism. Notable crypto advocates were tapped for key positions, and statements from then-candidate Trump pointed to greater regulatory clarity and a generally more permissive environment, Trump was very much viewed as the crypto candidate. So it came as no surprise when crypto got a Trump bump, with Bitcoin reaching all-time highs of over $100,000 in December 2024.

Consumer ownership trends are positive, but not yet massively so

On the consumer side, though, a major surge in the share of Americans who own cryptocurrency (and Bitcoin in particular) has not materialized, or at least not yet. Directionally, trends appear to be positive. Per our data, both self-reported cryptocurrency (16%) and Bitcoin (12%) ownership have rebounded from tracking lows seen in July 2024. 

But how can the rebound be so small when trading volumes and prices exploded in December? One possibility is that fewer but larger retail buyers are active in the market relative to smaller ones. This aligns with the observations of some market watchers who have noted the surge in new “whales” in recent months. Another possibility is that transactions may be taking place primarily among those who already owned cryptocurrency, preventing a more notable shift in the share among the U.S. population who reported owning it. In support of this idea, the chart above shows that the bounce in ownership was driven by millennials, men and high income earners, who have long been core crypto demographics. There could also be individual retail consumers who were underwater on their Bitcoin holdings and who may have been waiting for just such a price bump to liquidate some of their assets, counterbalancing new entrants into the market. 

Leading indicators point to modest retail market growth

Looking at buzz versus purchasing intention for Bitcoin illustrates the gap between the news cycle and consumer interest post-election. Positive buzz — the share of U.S. adults who had heard, read or seen something good about Bitcoin in the previous two weeks — reached an all-time tracking high after Trump’s victory. The share of U.S. consumers considering purchasing Bitcoin, meanwhile, began to climb, but more slowly. Positive buzz has since receded but purchasing consideration has increased to its current level above 20%.

Crypto users are now more likely to be Republicans, but purchasing consideration isn’t politicized

But has cryptocurrency itself become politicized? On the one hand, those who say they regularly use a number of major cryptocurrency exchanges are now quite a bit more likely to say they identify as Republicans, and less likely to say they are Democrats. The same shift is seen in those who say they regularly buy and sell cryptocurrency. 

But some of this could be due to the increased appeal of the Republican Party among demographics that were already more likely to trade cryptocurrencies. In short, it could be that the preferences, but not the inherent makeup, of the audience is changing. Prior research on how younger Americans are becoming more conservative would support this view. 

And despite Trump’s win being tightly linked to the price rally and expectations of a more friendly regulatory environment, there is not a large divergence between the broader populations of Democrats and Republicans in their professed interest in buying Bitcoin, the most well-known cryptocurrency coin. 

This last point is good news for cryptocurrency advocates because of two things. The first is that Bitcoin, as the most well-recognized cryptocurrency, would presumably be a bellwether for politically-charged attitudes towards other digital assets. The fact that we do not see polarization along partisan lines in purchasing consideration for it bodes well for a rebalancing of interest (depending on the news cycle). The second is that with the Trump family’s issuance of the $Trump coin in mid-January, some industry leaders were vocally concerned about a spillover effect in perceptions of other digital assets. Here too, it appears that any negative sentiment related to $Trump coin has not (or at least not yet) tainted views of Bitcoin, and likely of other major digital assets. But keeping an eye on how these types of stories are shifting perceptions among demographics that are not traditionally interested in cryptocurrency will be key going forward.

There are early signs of softening regulatory views 

In tandem with U.S. adults’ interest in cryptocurrency starting to trend higher, regulatory attitudes may also be softening. After a year and a half of U.S. adults largely saying cryptocurrency should be more heavily regulated than other financial assets, they are now evenly split: Equal shares say that crypto should be regulated the same as other assets. This is hardly a resounding vote for looser rules, but it gives advocates a plausible narrative that consumers are less afraid of potential harms from crypto than in the recent past. 

Universally good, but not amazing, news for the industry

News for the cryptocurrency industry from the point of view of consumer opinion is universally good: higher ownership, higher interest in purchasing across the political aisle and softening regulatory views. But the magnitude of these changes is thus far small compared to record buzz and trading volumes in November and December. And most of the enthusiasm seems to be among cryptocurrency’s typical demographic base — men, high income earners and millennials — as opposed to among potential growth targets. Given these dynamics, monitoring buzz and purchasing consideration among those expansion demographics will be key. While much remains to be done to court new users, the recent uptick in positive buzz suggests an opening to court them.