Home Crypto Crypto Adoption Flatlined As FOMO Turned Into Buyer’s Remorse in 2022

Crypto Adoption Flatlined As FOMO Turned Into Buyer’s Remorse in 2022

by Janine Lindsey

The cryptocurrency industry experienced a significant slowdown in 2022, with very few people willing to engage in this volatile market. According to a recent survey analyzed by researchers at the Federal Reserve Bank of Atlanta, the percentage of U.S. adults who owned cryptocurrency remained stagnant at 10% in 2022, after doubling in the two previous years.

The researchers pointed out that the decline in cryptocurrency ownership can be attributed to the negative headlines dominating the industry in 2022. Crashing prices, the arrest of prominent cryptocurrency figures, and the downfall of the NFT (non-fungible token) fad likely discouraged investors from entering the market. The blog post accompanying the analysis stated, “This makes us think that the get-rich-quick allure of crypto speculation waned in the wake of the spring 2022 market crash. Buyers’ remorse is real. Euphoria, anxiety, and regret all apply to crypto.”

Undoubtedly, the 2022 market crash played a significant role in dampening investor enthusiasm for cryptocurrencies. Bitcoin, the most well-known cryptocurrency, saw its value plummet and has yet to fully recover. As of now, Bitcoin is trading at less than half the peak it reached in November 2021, further undermining investor confidence.

However, the landscape has somewhat improved in 2023. Bitcoin’s value has increased to around $26,521, up from $16,604 at the end of 2022. While this represents growth, it is still far from the peak of $67,617. Despite the opportunity for potential gains, the researchers noted that few investors capitalized on the lower asset prices. They observed that crypto speculators tend to buy high and refrain from buying low, deviating from the investing philosophy of buying in times of weakness.

The cautious approach of investors suggests a hesitancy to engage with the cryptocurrency market, potentially fueled by the previous year’s market volatility and negative developments. It also indicates a departure from the traditional investment strategies of buying low and selling high.

While cryptocurrency remains an intriguing and potentially lucrative investment avenue, the events of 2022 have shown that it is not without risks. Investors need to educate themselves thoroughly and evaluate the market conditions before entering this volatile space. As the cryptocurrency market continues to evolve, it will be interesting to see how investors’ sentiments change and whether new opportunities will arise.

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