Bank of America Loses 50% of Its Active Crypto Users as Bitcoin Posts Worst Quarter in a Decade

The number of active cryptocurrency users at Bank of America has fallen by more than 50% from its peak during the height of the cryptocurrency bull market as cryptocurrency prices plunge and Bitcoin posts its worst quarter in more than a decade.

According to Bloomberg, the bank’s cryptocurrency users dropped below the 500,000 mark in May, from more than 1 million users back in November of last year when cryptocurrency prices were reaching new highs and the space’s total market capitalization was well above $1 trillion.

Bitcoin’s price has since tumbled from a near $70,000 all-time high to around $19,000 at the time of writing in what the bank called a “grave decline” in cryptocurrency prices.

To find the number of cryptocurrency investors using its platform, Bank of America looked at anonymized internal customer data that showed the number of clients that made investments in cryptoassets by sending or receiving payments to or from a cryptocurrency platform.

The data did not show what specific transactions were made, nor does it offer a comprehensive view of all cryptocurrency users. Cryptoassets dropped over the last few months as central banks throughout the world tighten monetary policy to rein in inflation.

As a result, The price of the flagship cryptocurrency Bitcoin has posted its worst quarterly performance in more than a decade, as in the second quarter of this year it lost around 58% of its value, going from $45,524 to just under $19,000 at the end of the three-month period.

Prices dropped along with sentiment toward cryptoassets, with Bank of America seeing between April and June a rise from 21% to 30% in investors saying they haven’t invested in the cryptocurrency space and don’t plan on doing so.

The bank noted that cryptocurrencies comprise less than 1% of overall U.S. household financial assets, suggesting that “relatively few people view crypto assets as a reliable long-term investment.”

According to the latest edition of CryptoCompare Research’s “Digital Asset Management Review“, in June, one Bitcoin ETP’s assets under management (AUM) managed to hit an all-time high despite the current crypto bear market.

The 21Shares Short Bitcoin ETP (SBTC), which “seeks to provide a -1x return on the performance of Bitcoin for a single day,” saw a 30-day return of 30.8% according to CryptoCompare, making it the third consecutive month where the product’s assets under management have risen, recording a new $16.5 million all-time high this month.

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