Federal regulators and policymakers have spent significant effort shepherding cryptocurrency from the fringes of the financial world into the mainstream. By introducing digital assets to exchange-traded funds and retirement accounts, the government aimed to normalize the sector. However, a July 9 report from the Urban Institute suggests that crypto investors remain a relatively rare demographic. While roughly 17% of American adults have owned cryptocurrency at some point in their lives, only about 9% of Americans currently hold it. This indicates that nearly half of all Americans who have ever invested in crypto have since bailed on the market.
This stagnation persists despite a high-profile campaign led by President Donald Trump, who has actively promoted crypto for ETF investors and retirement savers. Trump has pledged to make the United States the “crypto capital of the planet,” a campaign that helped push the price of Bitcoin to record highs in 2025. Yet, the anticipated crush of new crypto owners has not arrived. Bitcoin has shed roughly half of its value since those highs, and market analysts observe a cooling trend. Alex Carchidi, a contributing cryptocurrency analyst at The Motley Fool, noted that there is no big wave of new crypto investors. In fact, he observed that many professional crypto investors have been leaving the market or hibernating in some way since the market collapsed in October.
The Urban Institute’s findings align with previous research from the Federal Reserve, which has tracked crypto adoption through its survey of Economic Well-Being of U.S. Households. For context, the disparity in adoption is significant: roughly 62% of Americans own stocks, while crypto remains a niche interest. Amy Arnott, a portfolio strategist at Morningstar, suggests that people still view it as a more specialized asset class. She believes that the volatility and periodic huge declines are likely keeping people away. This skepticism is shared by critics of recent government moves, such as a proposed rule from President Trump’s Labor Department that would ease barriers against adding crypto to retirement plans. Critics argue that cryptocurrency has no place in retirement accounts because it is volatile and often misunderstood by the average American.
Luisa Godinez-Puig, a senior research associate at the Urban Institute, noted that for many people, crypto is a bit of a mystery and comes with a learning curve. The financial reality of the market has also played a role in investor behavior. The value of Bitcoin, the leading cryptocurrency, has fallen from around $125,000 in October 2025 to about $65,000 in late July 2026. Caleb Silver, editor in chief of Investopedia, stated that by definition, a falling price means people are selling. He added that those who experimented with buying it have likely decided they do not want to own it anymore after seeing the price crash. Silver noted that many investors who bought crypto over the last 15 years were simply chasing price.
The motivations for holding digital assets vary. Current crypto investors told the Urban Institute they own digital currencies to diversify their investments (45%), out of interest in new technologies (37%), or because they believe digital currencies are the future (27%). In contrast, former crypto owners were less interested in the currency’s promise and more concerned with investment returns; they stopped investing primarily because they were losing money. The survey found that most crypto owners have held their assets for several years, though their balances are generally small, with two-fifths of investors owning less than $250 in digital currency. Demographically, crypto investors skew young, are predominantly male, and Asian Americans are far more likely to own crypto than people of other races.
The political and regulatory landscape remains complex. In January 2024, federal regulators voted to allow ordinary American investors to buy and sell spot Bitcoin ETFs like stocks. By 2025, President Trump issued an executive order calling for federal regulation of digital currencies and proposed creating a national cryptocurrency stockpile. These efforts occur while Trump’s family businesses profit from the sector; according to The New York Times, those businesses earned $1.4 billion from various crypto projects in 2025. Despite this, the Urban Institute suggests that regulators should require banks, exchanges, and other providers to provide clear, standardized disclosures about potential risks.
Investment experts continue to question the value of crypto as a portfolio diversifier or a hedge against stocks. Among other problems, Bitcoin’s price tends to sink when the stock market is falling. Arnott wrote in a 2025 post that it is nearly impossible to pin down what its underlying value should be. For those reasons, she noted that a portfolio weighting of 5% or less seems prudent, and many investors may want to skip cryptocurrency altogether.
