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Bitcoin Adoption and Beliefs in Canada

Author

Listed:
  • Daniela Balutel
  • Christopher Henry
  • Jorge Vásquez
  • Marcel Voia

Abstract

We develop a tractable model of Bitcoin adoption with network effects and social learning, which we then connect to unique data from the Bank of Canada’s Bitcoin Omnibus Survey for the years 2017 and 2018. The model determines how the probability of Bitcoin adoption depends on (1) network effects; (2) individual learning effects; and (3) social learning effects. After accounting for the endogeneity of beliefs, we find that both network effects and individual learning effects have a positive and significant direct impact on Bitcoin adoption, whereas the role of social learning is to ameliorate the marginal effect of the network size on the likelihood of adoption. In particular, in 2017 and 2018, a one percentage point increase in the network size increased the probability of adoption by 0.45 and 0.32 percentage points, respectively. Similarly, a one percentage point increase in Bitcoin beliefs increased the probability of adoption by 0.43 and 0.72 percentage points. Our results suggest that network effects, individual learning, and social learning were important drivers of Bitcoin adoption in 2017 and 2018 in Canada.

Suggested Citation

  • Daniela Balutel & Christopher Henry & Jorge Vásquez & Marcel Voia, 2021. "Bitcoin Adoption and Beliefs in Canada," Staff Working Papers 21-60, Bank of Canada.
    • Handle: RePEc:bca:bocawp:21-60
    DOI: 10.34989/swp-2021-60
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    Cited by:

    1. Carbó-Valverde, Santiago & Cuadros-Solas, Pedro J. & Rodríguez-Fernández, Francisco, 2025. "Cryptocurrency ownership and cognitive biases in perceived financial literacy," Journal of Behavioral and Experimental Finance, Elsevier, vol. 45(C).
    2. Van Hove, Leo, 2025. "Bitcoin Adoption and Beliefs in Canada. A Comment on Daniela Balutel, Christopher Henry, Jorge Vásquez, and Marcel Voia (Canadian Journal of Economics, 2022)," Journal of Comments and Replications in Economics (JCRE), ZBW - Leibniz Information Centre for Economics, vol. 4, pages 1-13.
    3. Zamora-Pérez, Alejandro, 2026. "Who owns crypto in the euro area? Drivers of crypto adoption, payment use, and its interaction with fiat cash," Working Paper Series 3215, European Central Bank.
    4. Heng Chen & Walter Engert & Kim Huynh & Daneal O’Habib & Joy Wu & Julia Zhu, 2022. "Cash and COVID-19: What happened in 2021," Discussion Papers 2022-8, Bank of Canada.
    5. Balutel, Daniela & Henry, Christopher & Vásquez, Jorge & Voia, Marcel C., 2025. "Bitcoin Adoption and Beliefs in Canada. A Reply to Van Hove (Journal of Comments and Replications in Economics, 2025)," Journal of Comments and Replications in Economics (JCRE), ZBW - Leibniz Information Centre for Economics, vol. 4, pages 1-14.
    6. Us-Salam, Danish, 2025. "Mitigating Vulnerability: The Role of Risk Warnings, Information Order & Salience in Crypto Assets," Research Technical Papers 9/RT/25, Central Bank of Ireland.
    7. Marie-Hélène Felt & Angelika Welte & Katrina Talavera, 2024. "Untapped Potential: Mobile Device Ownership and Mobile Payments in Canada," Staff Working Papers 24-25, Bank of Canada.
    8. Van Hove, Leo & Kotkowski, Radoslaw & Polasik, Michal, 2026. "A scaling law for two-sided networks? Empirical evidence for a mobile payment scheme," Telecommunications Policy, Elsevier, vol. 50(1).

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    Keywords

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    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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