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Bitcoin has trekked a transformational path.

From getting maligned as seedy internet money by the legacy media, to becoming a highly-regarded reference point for decentralized financial systems, as major corporations and governments strive to develop their own Bitcoin equivalent.

Amid such stiff competition, Bitcoin remains the king of cryptocurrencies, and The Tokenist will tell you why with their recent Bitcoin adoption survey.

Bitcoin emerged from the breakdown of trust

Ever since the 2008 financial crisis, unprecedented bank bailouts, and departure from basic principles of financial accounting, people have started to question the established financial regime.

What is the nature of money? How does money issuance relate to the economy? Should money be in the domain of governments exclusively? These questions gave rise to cryptocurrencies, first among them being Bitcoin (BTC).

After over a decade, The Tokenist, a specialist portal dedicated to delivering news and analysis of all things FinTech and cryptocurrency-related, conducted a comparative Bitcoin adoption rate survey to clear out the fog of diffused and outdated information.

After such a major turning point as Covid-19 — which even spurred politicians into action to develop a digital dollar — older surveys are of little use unless we use them as reference points to current data.

The Tokenist undertook just such an approach. First, compiling all the relevant 2017 surveys on Bitcoin attitudes, and then surveying nearly 5,000 participants across 17 nations, in April 2020. Unlike previous such surveys, The Tokenist included questionnaires related to Covid-19’s impact on Bitcoin favorability.

Covid-19 plummets investment trust while raising Bitcoin trust

There is no better memetic image to sum up what has happened since governments decided to shut down entire nations as a response to a virus that has a moderate to low fatality rate. To add insult to injury, lockdowns do nothing but dangerously destabilize society, according to statistical analysis by JPMorgan Chase.

As the saying goes, what’s done is done. The silver lining to this extreme self-inflicted situation is that institutions exposed themselves to even the most low-info strata of society. As the Federal Reserve poured trillions of dollars into the financial system to stave off total economic collapse under the umbrella of quantitative easing, people began to ask – what is money?

It turns out, when people begin to ask that question, it’s a sign that people are losing trust in institutions. Consequently, cryptocurrencies surge, with Bitcoin leading the charge. The first predictable outcome of the Covid-19 impact comes in the form of shifting trust. The shift from traditional assets, such as gold, stocks, bonds, to cryptocurrency.

Before Covid-19 took full steam, those politicians privileged to access information unavailable to the public were able to cut their losses. On the business side of things, at least ten CEOs and other upper managers stepped down in anticipation of the economic crisis.

At the end of the Covid-19 road, the wealthiest among us got wealthier by about $565 billion, according to Business Insider. In other words, there is a divide in the availability of financial information and financial mechanisms. This divide is a fertile ground for distrust in traditional assets.

Accordingly, Bitcoin surged in trust by 13% against three major asset categories: gold, real estate, and government bonds. Therefore, 45% of respondents answered in the positive when asked if they prefer Bitcoin over these traditional assets. For male millennials, such a favorable response goes even further, surpassing 50%.

Expectedly, this aligns with the drastic increase in Bitcoin familiarity.

Male millennials are again leading the charge in adoption rate, with 20% of respondents being very familiar with Bitcoin, and those who have owned it have more than doubled, at 7%.

On another note, the numerous anecdotes about kids teaching their parents and grandparents the ways of digital technology, while they are cooped up in quarantines, seem to align with The Tokenist survey as it shows that 51% of respondents over the age of 65 are now familiar with Bitcoin.

And as actual use and confidence in understanding Bitcoin grow, so does its trust over banks. Just under half, 47% of respondents, would trust Bitcoin over the banking system, which is a significant increase of 29% in the last three years.

Familiarity vs Usage and Retention

It is one thing to be familiar with Bitcoin, but another thing to actively use it as a trading and exchange asset. For a long time, using cryptocurrencies was a cumbersome affair.

Now, thanks to numerous FinTech initiatives in the form of neobanks such as Revolut and Plutus, cryptocurrencies are not separated but integrated within single platforms, alongside fiat money, just a few clicks away.

As you can see from this graph, a convenient infrastructure is just beginning to increase the likelihood of people buying Bitcoin in the next five years.

Millennials are the most likely demographic to purchase BTC in the next five years, while everyone over 65-years old is the most reticent group, with 0% to 3% for very likely and somewhat likely categories.

Unfortunately, this is to be expected from a demographic that grew up and matured within a system completely devoid of any non-governmental alternatives to turn to.

Lastly, how does Bitcoin fare when it comes to using Bitcoin as a store of value?

In short, one-third of millennials would hold on to it and see it grow, while slightly less than one third, 27%, would sell BTC if someone gave it to them. Those who are unsure are still a substantial group, which is predictable in a market infused with uncertainty as we leave behind the economic wreckage of Covid-19.

To conclude, the effect of the Fed conjuring up trillions of dollars has cracked, if not broken, a major long-standing psychological barrier – money tangibility.

It does not require an advanced education to see that the Fed is not actually creating wealth. It is merely using digital computers and math, under the umbrella of Modern Monetary Theory (MMT), to conjure unfathomable amounts of money.

In fact, which scenario is more likely, that you would find an average person who understands what the Fed is doing, or that you would find an average person who understands what Bitcoin is?

Just such stark contrast is the culprit for a drastic decrease of people who view BTC’s digital nature as negative.

“I don’t see the value in Bitcoin because it is an intangible good (i.e., I can’t touch it)”?

Were you shocked to learn that the Fed can “print” trillions of dollars on multiple occasions, with seemingly no consequence? Are you still having trouble explaining to your friends the nature of Bitcoin? We want to know what you think in the comments section below.