83% of Bitcoin holders in UK turn to crypto interest accounts as Bank of England explores negative rates
New study by Mode Banking analysts reveals that in today’s historic low interest environment more and more crypto holders in the UK are topping up their Bitcoin (BTC) interest accounts.
In April 2020, when Mode first started offering 5% APY on BTC, many but not all BTC holders rapidly moved their holdings into Mode’s newly launched interest-earning account. As the pandemic evolved, Mode saw an increasing number of users choose to earn BTC yield rather than keeping their BTC funds dormant.
Starting in April 2020, 24% of Mode users with positive BTC balances (≥0.01 BTC) kept their funds fully dormant on the account, meanwhile, 76% were actively earning interest on either part or all of their BTC holdings. In May 2020, the gap widened to 19% and 81% respectively, and by the end of June, 83% of BTC holders were actively earning interest on their BTC.
From a generational perspective, in April, only 67% of Boomers & Gen-X who had BTC opted to earn interest, while Millennials & Gen-Z showed a more significant uptake, with 79% earning interest on their BTC. However, in May, the generational gap was significantly narrower, with 80% of Boomers & Gen-X and 82% of Millennials & Gen-Z having an active interest generating account. Lastly, in June, Mode analysts saw interest account usage among younger age groups steadily increase to 84% yet it remained the same (at 80%) among older age groups.
“Our BTC interest account, the Bitcoin Jar, is one of our most popular features, so the fact that the vast majority of our users are making use of it, comes as no surprise. What’s interesting about the findings of this study, however, is that as a result of the current historic low-interest-rate environment more and more investors are actively turning to their digital assets to unlock high yields, and the effects of this may not just be short-lived.” said Ariane Murphy, Head of Marketing at Mode.
“Overall, we’re seeing a shift of mentality and an increased drive to wanting to explore alternative investment avenues. Investors are realising that new-generation investment products such as blockchain-based financial products can be one of the strongest and safest options to generate a return on their holdings, especially during times of uncertainty as they can deliver high yields, 365 days of the year 24/7, and users can easily convert that yield into cash when needed. The Bitcoin Jar ticks all of those boxes.”
Google Trends indicates that the global search volume for the “interest account” has increased significantly over the last 2 years and peaked in the months of June and July. The search interest index is measured in points with 100 being the highest. People’s search for interest accounts indexed at around 50-75 before Covid-19, but has consistently remained above 75 ever since the economic meltdown began in mid-March.
Find the full data story with the charts here: https://modebanking.com/2020/08/05/83-of-bitcoin-holders-in-uk-turn-to-crypto-interest-accounts-as-bank-of-england-explores-negative-rates