Rising prices, not banks, are driving up demand for Bitcoin, according to the Bank for International Settlements.

The Bank for International Settlements (BIS) studied the main motives behind Bitcoin adoption by retail investors.

According to the Bank for International Settlements, investors are more interested in cryptocurrencies’ rising prices rather than their dislike of banks or their belief that cryptocurrencies are good stores of value.

On November 14, the “BIS Working Papers” published an “research” looking at how Bitcoin prices, crypto trading, and retail usage are connected.

It examined the drivers of crypto adoption by retail investors by measuring the downloads of trading apps that supported crypto trading as a proxy for adoption and user investments at the time of download.

According to the report, “a high price of Bitcoin is associated with a significant rise in the number of new investors, that is, people who downloaded crypto apps,” and “most retail investors downloaded crypto apps when prices were high.”

The BIS found that app downloads for cryptocurrency exchanges increased from July to November 2021 as the price of Bitcoin rose rapidly, reaching a peak one month before Bitcoin’s all-time high of $69,000 one month earlier, when daily downloads spiked to around 1.4 million.

It deduced that 40% of crypto app users were men under 35 and were part of the most risk-seeking population segment.

According to the report, “contrary to explanations based on Bitcoin being a safe haven, the price of Bitcoin remains the most important factor when we control for global uncertainty or volatility.”

Based on the assumption that app users downloaded a crypto app and subsequently purchased Bitcoin at $20,000, the BIS estimated that up to “81% of users would have lost money” if they had purchased Bitcoin at that price.

According to blockchain analysis firm Glassnode, which on Nov. 14 confirmed that over half of Bitcoin addresses are in profit, the BIS’s assumptions seem to align with data.

51.881% of Bitcoin $BTC Percent Addresses were generated in the last seven days, a 2-year low

The BIS noted that, as Bitcoin prices rose and small users purchased, “smaller users incurred losses due to the return of the largest holders (‘whales’ or ‘ humpbacks’).”

It found that between August 2015 and June 2022, the total app downloads per 100,000 people in Turkey, Singapore, the United States, and the United Kingdom were the highest.

The BIS reported that only 1,000 crypto apps were downloaded per 100,000 people in China and India, the latter of which experienced only limited retail adoption due to greater legal restrictions on crypto.