Bitcoin adoption rates vary by state: Identifying where cryptocurrency is most popular

Over 2.78 million Americans have actively participated in cryptocurrencies, with Bitcoin being the most prevalent, capturing about 75% of all users. The surge in Bitcoin’s value over the years has brought wealth to many investors. The IRS began tracking cryptocurrency involvement more seriously in 2020 by asking tax-filers about their participation, even if there were no taxable transactions.

SmartAsset analyzed the latest IRS data to reveal which states have embraced Bitcoin and other cryptocurrencies the most, offering insights into economic, technological, and political inclinations in different regions.

Washington leads in cryptocurrency adoption, with 2.43% of tax returns indicating involvement in 2022. Western states like Utah, California, Colorado, and Oregon also show strong crypto adoption trends, making up a significant portion of the top 10 states.

Crypto participation surged in 2021, reaching over 5% in certain states. For instance, Washington peaked at 6.22% that year when Bitcoin’s price doubled from $32,000 to $64,000. On average, the adoption rate was 1.26% in 2020, 3.8% in 2021, and 1.6% in 2022.

In the southern states, cryptocurrency adoption is less popular, with less than 1% of households involved in crypto in states like West Virginia and Mississippi. High-income households are more likely to participate, with rates ranging from 5.55% for those earning $500,000 or more to 1.27% for those earning $1 to $75,000 annually.

States like Washington, Utah, California, and Colorado have high percentages of tax returns indicating cryptocurrency involvement in recent years. The data shows a clear trend of increasing crypto adoption across the United States, with wealthier households leading the way.

In summary, the analysis of cryptocurrency involvement by state provides valuable insights into the popularity of Bitcoin and other digital currencies across different regions of the country. The data offers a glimpse into the economic, technological, and social preferences of Americans regarding cryptocurrencies, illuminating where they are most prevalent and adopted.