The document discusses retail trends in cryptocurrency, highlighting that approximately 1 in 8 Americans have invested in crypto, with a significant increase in retail investors since March 2020. It notes the demographic profile of cryptocurrency buyers as being predominantly young, high-income, and male, motivated primarily by long-term price appreciation. The document also indicates that retail participation in cryptocurrency markets is expected to continue, despite facing regulatory uncertainties and ESG concerns.

1. Retail trends in crypto

2. Federal Reserve Bank of San Francisco 2
The views expressed in this presentation are
my own and do not necessarily reflect those
of the Federal Reserve Bank of San Francisco
or the Federal Reserve System.

3. Federal Reserve Bank of San Francisco 3
SF Fed Fintech
Source: Coinbase Q2 2021 Shareholder Letter dated August 10,
2021
OUR MISSION
Promote responsible, inclusive
innovation in the financial
system through supervision,
thought leadership, and
outreach
Today’s focus:
• Who buys crypto?
• How do they use it?
• What patterns or preferences are
prevalent?
• What is likely to happen to crypto demand
in the near-medium term?

4. Federal Reserve Bank of San Francisco 4
As many as 1 in 8 Americans have
bought cryptocurrencies
Number of retail investors has surged since March 2020
1.5
2.1
2.8
6.1
8.8
Q2 '20 Q3 '20 Q4 '20 Q1 '21 Q2 '21
Coinbase global monthly transacting users
(MTUs), millions
Source: Coinbase Q2 2021 Shareholder Letter dated August 10,
2021
13%
14%
AmeriSpeak Omnibus Survey,
NORC at the University of
Chicago
Total sample of 1,004 U.S. adults
Polled from June 24-28, 2021
Gemini State of U.S. Crypto
Report
Total sample of 3,000 U.S. adults aged 18-
65 with minimum $40,000 in household
income
Polled from Oct 19 - Nov 16, 2020
Reported number of US adults who have traded
cryptocurrencies

5. Federal Reserve Bank of San Francisco 5
Cryptocurrency buyers skew
young, high-income and male
Profile of retail cryptocurrency buyers
• $111,000 avg household income
• 74% male
• 68% first bought within last 2 years
4%
19%
35%
39%
3%
55-65
45-54
35-44
25-34
18-24
Source: Gemini 2021 The State of U.S. Crypto Report
Reported age distribution

6. Federal Reserve Bank of San Francisco 6
Cryptocurrency buyers are
largely motivated by long-term
price appreciation
High percentage of underbanked customers reportedly using crypto for
payments
11%
12%
27%
36%
69%
Payment privacy
Pay for in-person
purchases
Pay for online purchases
Active trading
Long-term investment
10%
12%
37%
Banked Unbanked Underbanked
37% of underbanked
consumers reportedly
use crypto along with
prepaid debit cards for
payments
Reported reasons for buying cryptocurrencies
Source: Gemini 2021 The State of U.S. Crypto Report
US cryptocurrency ownership by banking
status
Source: Morning Consult note published August 17, 2021

7. Federal Reserve Bank of San Francisco 7
Source: NYDIG Survey: Bitcoin and Banking, January 2021Link Source: Cornerstone Advisors Survey, December 2020
83%
81%
71%
Would be interested in earning
interest in Bitcoin on an account
such as savings, money market, or
CD
Would be interested in buying
Bitcoin through my bank
As a Bitcoin holder, I would switch
my primary bank to a bank that
offered Bitcoin-related products
32%
60%
definitely
55%
34%
maybe
Prospective crypto
buyers
Current crypto buyers
If your bank gave you the ability to invest in
cryptocurrencies, how likely would you be to use it?
Retail investors strongly prefer
to manage crypto exposure
through their banks

8. We expect retail participation
in cryptocurrency markets to
persist
Federal Reserve Bank of San Francisco 8
Headwinds
• Uncertain regulatory
environment
• ESG concerns
Tailwinds
• Marketing push by new and
existing players
• Crypto job boom
• Rising availability of crypto in
other financial products (IRAs,
401(k))

9. Questions?