A new report from the Bank of Canada has unearthed some intriguing facts about the state of Bitcoin ownership across the country.
The report found that about 13% of Canadians owned Bitcoin in 2021 – but that investors of average financial literacy are the least likely of all to buy in.
When and Why Do Canadians Buy BTC?
As the central bank’s survey showed, Bitcoin ownership figures in 2021 were more than double the 5% ownership present from 2018 to 2020. The increase was largely driven by the wider availability of products for purchasing Bitcoin, alongside widespread increases in Canadian savings during the pandemic.
Meanwhile, about 90% of Canadians are now aware of Bitcoin’s existence. This broad awareness mimics Grayscale’s survey results last year, which found that 99% of U.S. investors know of Bitcoin.
Knowledge of Bitcoin beyond the term itself was less common, however. 40% of survey respondents who owned Bitcoin (and 66% who did not) demonstrated a relatively low level of knowledge when verifying core statements such as “Bitcoin is backed by a government” (which is false). This figure was higher than in previous years, in which the share was typically under 30%.
The timing of when investors bought Bitcoin also had some bearing on their motivation for doing so. Post-2019 buyers were more likely to take an interest in Bitcoin as ‘new technology, whereas long-term holders were more attracted to it due to a lack of government trust or as a payment method.
That said, both parties were overwhelmingly likely to see Bitcoin as an investment vehicle. Naturally, long-term holders benefitted more strongly from the Bitcoin price run-up in 2021 than recent holders.
Perhaps unsurprisingly, most Bitcoin holders were not whales. The median Bitcoin holder held $500 CDN worth of the asset, while 70% held under $5,000 CDN worth.
Are Bitcoin Investors Smart?
Financial literacy proved a strong predictor of whether someone bought Bitcoin – but not as one might expect.
In 2021, Canadians with low financial literacy had a 15.6% chance of owning Bitcoin, according to the full report. However, a similar figure was found among highly literate investors, standing at 14.7%. The discrepancy was funda mong average literacy investors, of which only 8.8% owned Bitcoin.
In previous years, low-literacy investors were the most common holders. The figures for low, medium, and high literacy levels in 2020 were 8.4%, 5.3%, and 5.3%, respectively.