Between Bitcoin’s historic performance, the pandemic, the emergence of Non-Fungible Tokens (NFTs), and the Metaverse, 2021 was a pivotal year for cryptocurrencies. The market hit numbers never seen before, and global crypto adoption rates went up significantly.
The events in 2021 bolstered adoption in France, not only for retail investors but also for companies and institutional traders. Some of the notable crypto exchanges that helped traders acquire crypto include Binance and Coinbase.
A recent study conducted by the IPOS, a polling institute in conjunction with Blockchain Partner on 2,003 individuals over 18 years, found that:
77% of the respondents knew about cryptos.
The research also showed that citizens had considerable knowledge of crypto concepts.
About 15% of the respondents knew of NFTs.
Additionally, participants knew about decentralized finance (DeFi) and stablecoins at 21% and 19%, respectively.
The report puts crypto adoption in France in late 2021 at 8%. About 61% of those who owned crypto had acquired virtual currencies in the past three years.
This suggests that adoption rates increased after the crypto price crash in 2019 and the lockdown in 2020.
Bitcoin was the most popular crypto asset among crypto holders.
Bitcoin dominated by 69%, followed by Bitcoin Cash at 28% and Ethereum at 14%.
The study saw a positive increase in the uptake of both Binance Coin (BNB) and Polkadot (DOT).
BNB rose from 4% to 22%, while DOT rose from 1% to 12% among crypto owners
The main meme coins, Shiba Inu and Dogecoin, have benefited from the media such as tweets from Elon Musk.
A study in 2020 by TripleA indicated that about 2.1 million people in France owned crypto. This was 3.3% of the total population.
According to the TrippleA study, about 51% of the population knew about cryptos. Comparative analysis of the two reports shows a 16% increase in crypto awareness between 2020 and late 2021.
Cryptocurrency Adoption by Demographics
According to the IPOS survey, men dominate crypto adoption.
60% of crypto owners were men compared to 40% women.
Of those who planned to invest in crypto, 57% were men compared to 43% of women.
Individuals under the age of 35 years dominated crypto ownership in the country. They represent about 46% of the crypto holders. The share decreases to 21% for those between 35 - 41 years. The share further reduces to 10% for those above 66 years.
The crypto appetite for the younger generation seems to be extremely high.
Adoption rates would jump up to 12% if the 18 - 35 age group were the only ones considered in the study.
Their share of adoption is almost doubling that of the next age group.
Data also shows that the 18-35 age group leads for the age group that intends to own crypto at 29%. The generational gap points to the possibility of an increase in adoption in the coming months.
37% of crypto owners said they have an income of less than €18,000 per year. The analysis shows that in France, those with lower incomes are more likely to hold crypto this is possibly due to their young age.
Current crypto holders are likely to live in large cities, especially Paris. However, the difference between rural and urban crypto adoption rates is seen to be fading away for those planning to invest in crypto.
How the French Spend their Money on Crypto
76% of those who own crypto spend less than 10% of their savings, according to the report by IPOS. These figures show a prudent investment approach and portray an image that contradicts the general notion that crypto owners are reckless in their investment.
Only about 16% say they have 26%-50% of their saving invested in crypto, while 7% say they have more than half their savings in crypto.
What Spurs Crypto Adoption in France?
The IPOS survey indicates that most of those planning to invest in crypto want to realize quick yields from their money.
This represented about 60% of those intending to invest in crypto.
The desire to hold crypto as a long-term investment came second at 38%, while protection from inflation came in third at 22%.
About 58% of the respondents believe that crypto is a safeguard against inflation.
Other reasons why people favoured crypto:
12% suggested they lack trust in banks and would prefer crypto to store their monetary value.
10% desired confidentiality of transactions.
Some major companies in France are also driving adoption by collaborating with partners in the crypto space while some merchants are beginning to accept crypto payments.
For instance, the French fintech startup Lydia enables its customers to trade cryptos using the exchange platform BitPanda.
What Hinders Crypto Adoption in France?
The IPOS survey indicates that lack of knowledge prevented many from investing in crypto. Here is the breakdown of the statistics
Insufficient knowledge of how crypto works contributed to 48% of why people avoided crypto
30% considered crypto assets too risky
28% admitted they were not interested
20% say they don’t have money or savings to invest in crypto
10% lacked access to crypto services such as wallets and exchanges
How Crypto Holders Store their Digital Assets in France
When looking at crypto adoption, it's also prudent to analyze how people store their digital assets.
The study by IPOS shows that:
62% of crypto holders store it on custodial platforms such as brokers and exchanges.
32% of those who own crypto store it on external wallets, while 5% use both solutions.
Regulations and Crypto Adoption in France
France has already enacted the PACTE laws, which authorize the AMF (The Financial Markets Authority) to register crypto service providers such as exchanges and brokers. These regulations apply to both local and international companies.
Some industry players commend the authority for enacting such laws agreeing that these regulations will reassure customers and companies. The laws are also likely to promote crypto adoption as more people accept crypto as alternative assets recognized by the government.
However, small enterprises in the crypto space decry the complex and costly procedures to get licenses. They say this will hinder the innovation and adoption of crypto in the country.
What Next for Crypto Adoption in 2022
The IPOS study discovered that about 30% are willing and planning to invest in crypto in the coming months. By conservative estimates, crypto adoption is likely to climb to about 12% by the end of 2022. Additionally,
43% of the respondents believe that crypto will co-exist with fiat currencies and that crypto will be used as a payment medium.
19% suggest that crypto will overtake fiat currencies and be the dominant payment mode.
25% indicate that crypto adoption is minimal and likely to disappear in the future
47% believe that banks will offer crypto services
Data estimates that about 500 crypto projects are currently in development in the country. The crypto ecosystem in France is therefore likely to get more impetus and interest through adverts and social engagements. This is likely to aid in crypto adoption.