Brave, outspoken, and unapologetic about it, Canadians find themselves caught in the crossfire of regulation and market trends.
The struggle is real for Canadian crypto holders as stringent rules and market conditions have dealt a severe blow to the ownership of Bitcoin and cryptocurrencies in the nation.
2022 has proven to be a year that Canadian crypto enthusiasts would rather forget. A study published by the Bank of Canada (BoC) on July 26 presents a bleak picture.
As one ventures through the details, it becomes apparent that neither market conditions nor government regulations have been kind to crypto investors in the country.
A drastic decline: No favor for Canadian investors
The declining graph tells a story of disappointment, reflecting a considerable fall in Bitcoin ownership in Canada. The figures slumped to a mere 9% by August 2022, marking a sharp decline from the massive crypto adoption witnessed just a year before in 2021.
A late rally in the year saw BTC adoption inching back up to 10%, but the damage was done. Notably, this drop does not indicate that Canadian investors were diversifying their crypto investments.
The BoC study explicitly notes a decrease in ownership across other altcoins as well. Canadians are not shifting from Bitcoin to other cryptocurrencies; they are exiting the crypto market altogether.
The reasons? A complex blend of market factors, ecosystem collapses, regulatory hurdles, and substantial price depreciation. Interestingly, some of those with high financial literacy seem to have exited the market, leaving those with lower financial literacy holding the digital bag.
The popular choices and hopes for recovery
While Bitcoin remains the main attraction, altcoins have their own place in the Canadian crypto market. Dogecoin, driven by the Elon Musk-induced hype, found itself as the most sought-after crypto investment among Canadians. Other popular choices included Ethereum, Bitcoin Cash (BCH), and Litecoin.
But there’s a twist to this tale. A substantial decline in the ownership of these altcoins was observed in 2022. The fall of Bitcoin wasn’t because of a shift to other cryptoassets; it was a step away from digital currency investment altogether.
What does the future hold for Canadian crypto investors? While 2022 was a year of setbacks, there’s a sense that with government intent to provide regulatory clarity and the potential stabilization of the market, crypto ownership in Canada could pick up.
Yet, those hopeful for a revival should tread with caution. The BoC’s five core functions include supplying Canadians with bank notes they can use with confidence.
The research on digital currencies is relevant for monitoring conditions that could warrant the Bank issuing a central bank digital currency (CBDC). A monitoring eye is always on the horizon.
The lessons from 2022 are hard to ignore. Bitcoin’s price plunged by over 50%, security regulators increased their scrutiny, and major exchanges faced challenges. Bitcoin ownership among Canadians has declined, and the picture for altcoins doesn’t look much rosier.
The Canadian crypto landscape is turbulent, to say the least. One could hope that the struggles faced by Canadian crypto holders will give birth to a more robust and transparent digital currency environment in the country.
Yet, for the average Canadian investor looking for a breakthrough in crypto, the waiting game continues.
