With cryptocurrencies continuing to gain traction as an increasingly popular investment vehicle globally, my team at Investing.com wanted to gauge how interested U.S. investors are in these currencies at the moment.
Looking at our data for 2017 (January – September), we put together the above infographic. What it shows is that cryptocurrency interest across the U.S. is driven by differing virtual currency regulations within each state.
Interestingly enough, topping the list of states interested in digital currencies are Nevada, Texas, and New Hampshire. And perhaps this can be explained:
- In June, Nevada became the first state to ban taxes on blockchain use. Perhaps as a result, the state currently tops the list with 4,057 users out of a total 36,230 (11.2 percent) in the Silver State interested in cryptocurrency.
- Texas was the first state to release an official position on bitcoin with Memorandum 1037, which says no money transmitters license is required to sell bitcoin. And just last month, the first Bitcoin-only real estate transaction was completed in the Lone Star State. From a total of 324,914 users in Texas, 34,116 showed an interest in cryptocurrency (10.5 percent), putting Texas in second place.
- In June, New Hampshire Governor Chris Sununu signed a bill into law that exempts digital currency traders from the state’s money transmission regulations. Of the state’s 16,442 users, 1,644 were interested in cryptocurrency (10.4 percent), making it the state with the third highest interest in crypto.
California and Colorado round out the top five most interested U.S. states, at fourth and fifth place respectively.
Let’s take a look at the bottom of the list — the states voicing the least interest in cryptocurrencies. In this part of the list, too, legislation seems to play a key role:
- New York ranked 38th, with only 17,064 users out of a total 426,617 (4 percent) interested in the digital currency. In 2015, The New York State Department of Financial Services (NYDFS), issued a business license of virtual currency activities, termed BitLicense. At least 10 bitcoin companies announced they were stopping all business in New York State because of the new regulations.
- Hawaii is the state with the least interest in cryptocurrency; it has also taken quite an unfriendly stance towards digital currencies. Coinbase, a bitcoin and ethereum exchange, ceased supporting its customers in Hawaii due to what it called “impractical regulatory policies”, and Hawaiians were forced to close their accounts. Of the state’s 17,755 users just 325 were interested in cryptocurrency (1.8 percent).
This data shows an important correlation between regulatory measures on cryptocurrencies and the interest or popularity of those currencies in different states. We often like to think of these currencies as a medium to escape state regulation, but it is clear that each state still has the means either advance or delay and hamper the adoption of the new currencies.
These legislative positions are likely to have the biggest impact on whether currencies like bitcoin go fully mainstream or remain rarely used niche assets.
Igal Stolpner is Head of Growth at global financial platform Investing.com.
Clement Thibault is a Senior Analyst at Investing.com.