Coinbase, the global crypto platform, publishes Coinbase Crypto Report Europe 2022 H1 (CCRE). CCRE 2022 H1 shows a rather positive mood among private crypto investors in Europe and also illustrates the increasing establishment of the crypto asset market.
This increasingly rapid development is reflected in many areas, but especially in the uninterrupted growth of investors new to the cryptocurrency market.
The European sentiment among private crypto investors is presented separately for the first time in CCRE 2022 H1 by the new Coinbase Crypto Sentiment Index (CCSI). The purpose of CCSI is to show the crypto mood of the population and to identify changes in the investment climate among crypto investors at an early stage. For this purpose, participants in the crypto market are asked about their plans regarding their crypto inventory (buy, hold, sell) in the next 12 months.
“Measuring the crypto mood in the population is a very exciting approach,” says Prof. Dr. Philipp Sandner, head of the Frankfurt School Blockchain Center. “How the investment climate in the nascent cryptocurrency industry changes over time – and for what reasons – is absolutely relevant to the entire industry. This is where CCSI can make a valuable contribution by identifying trends at an early stage.”
CCSI shows positive sentiment among market participants in Europe
CCSI has so far been measured in the last quarter of 2021 and the first quarter of 2022. The survey of 2022 shows that the general mood in the market remains optimistic, even though market participants had to contend with significant price declines and relatively pronounced volatility in the first quarter of 2022: 56% of crypto asset surveyed said they would increase in the next 12 months to want to increase their crypto inventory. Furthermore, 33% said they plan to hold their stocks, while only 11% said they plan to reduce their stocks.
CCSI reflects this positive investment climate among market participants in Europe and with a value of 123 points is significantly above the base value of 100 points (neutral market sentiment). Compared to the first measurement in the third quarter of 2021, the index has risen by four basis points. However, for a reliable statement, the Coinbase Crypto Sentiment Index needs to be measured repeatedly in order to develop a trend.
More and more European investors are turning to cryptocurrencies
The positive investment climate probably also contributes to the fact that there has been a wider acceptance of cryptocurrencies among the population in recent times. Crypto-assets thus establish themselves more and more clearly as a new asset class. The distribution of first-time purchases of cryptocurrencies per year shows an increasing annual number of new participants in Europe: 60% of all new participants in cryptocurrencies became active for the first time in the years 2019-2021, confirming the forecast made in CCRE 2021. The compound annual growth rate for new participants has increased from 29% to 32% compared to 2021 CCRE. So the adoption of cryptocurrencies is gaining momentum and it shows that the new asset class is here to stay.
“While crypto-adoption in Europe is still in its infancy, the rising annual growth rate shows that interest in cryptocurrencies is constantly growing,” said Timo Emden, founder of Emden Research and Market Analyst. “It is exciting to see how this development will continue in 2022 and beyond.”
Barriers to investing in cryptocurrencies
The CCRE 2022 H1 addresses for the first time why some citizens in the six largest economies in Europe do not currently have cryptocurrencies. 25% of the respondents stated the lack of investment-relevant information as the reason for this. Security concerns about cryptocurrencies discouraged 23% of respondents from investing. 21% of respondents could not invest in cryptocurrencies due to lack of liquidity. And the lack of know-how on how to invest in cryptocurrencies was a barrier to investment for 8% of respondents.
“The crypto industry still has a responsibility to better explain crypto assets and to minimize the barriers for investors in different areas,” said Sascha Rangoonwala, Country Manager Germany at Coinbase. “To further drive the adoption of cryptocurrencies, it is important that the industry provides understandable information, learning opportunities and low-threshold access.”
View of Germany
In Germany, 47% of investors plan to increase their holdings, while 43% want to keep their holdings. In general, the adoption of cryptocurrencies in Germany is somewhat slower. But in the years from 2019 to 2021, a remarkable 68% of investors have intervened for the first time. The two most popular cryptocurrencies in Germany are – as in the other five countries – Bitcoin, followed by Ethereum. With 71%, Bitcoin is a figure above the average in investor portfolios, while Ethereum is slightly underrepresented by 42%.
About Coinbase Crypto Report Europe (CCRE) and Coinbase Crypto Sentiment Index (CCSI):
Coinbase Crypto Report Europe (CCRE) aims to regularly analyze the growing cryptocurrency sector in Germany and Europe. The recurring implementation serves to illuminate current developments, create transparency and identify trend reversals in the cryptoactive industry at an early stage.
CCRE is published by the Frankfurt School Blockchain Center on behalf of Coinbase. To this end, the Frankfurt School Blockchain Center, together with INTAS.tech, regularly collects and evaluates data on the behavior, investment climate and demographics of owners of cryptocurrencies in Europe. The CCRE also provides an overview of topics such as crypto investors entering the crypto asset market for the first time and the use of crypto-specific investment opportunities such as staking and cryptocurrency investments. CCRE also captures investment barriers, ie reasons why respondents do not invest in cryptocurrencies.
The Coinbase Crypto Sentiment Index (CCSI) aims to show the cryptocurrency sentiment of the population and to identify changes in the investment climate among crypto investors at an early stage. For this purpose, participants in the crypto market are asked about their plans regarding their crypto inventory (buy, hold, sell) in the next 12 months. This cryptocurrency sentiment was measured for the first time in the third quarter of 2021.
The full Coinbase Crypto Report Europe 2022 H1 is available for download here.