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As interest in Bitcoin continues to rise and fall with the markets, a new study from SmartAsset offers one of the clearest snapshots yet of where Americans are actually participating in crypto. The findings reveal that enthusiasm isn’t spread evenly across the country. Some states have developed strong pockets of adoption driven by tech culture, higher incomes and a comfort with digital innovation, while others remain slow to engage.
These regional differences don’t just show where Bitcoin has the most momentum. They also help frame the broader conversation around who’s driving crypto adoption, who isn’t, and what that means for anyone thinking about getting involved. Whether you’re already familiar with crypto or are simply “crypto-curious,” the numbers provide helpful context for understanding where crypto adoption is happening most.
The study reviews IRS tax return data and highlights a clear cluster of states where crypto activity is significantly above the national average. These places consistently outpace the rest of the country in terms of the percentage of taxpayers reporting crypto transactions.
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Here’s the top 5 most popular states that residents reported crypto transactions on their tax returns:
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Washington: 2.43%
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Utah: 2.36%
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California: 2.25%
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Colorado: 2.17%
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New Jersey: 2.15%
While these percentages may seem small at first glance, they’re meaningfully higher than the national rate, which sits closer to the mid-1% range. Washington’s leading position makes sense, considering its strong tech presence (Amazon, Microsoft), higher-than-average incomes and a population generally comfortable experimenting with new financial technologies. The same goes for Utah and Colorado, both of which have growing tech sectors and younger demographics who tend to be more open to digital assets.
California’s appearance near the top is also no surprise, as a state long synonymous with innovation and tech culture. The fact that so many residents engage with Bitcoin and other cryptocurrencies reflects both the financial literacy and the tech-forward mindset of its population.
New Jersey is perhaps the most interesting state in the top five, signaling that crypto enthusiasm isn’t limited to the West Coast and Mountain West. Overall, these states share a blend of affluence, digital literacy and early-adopter attitudes that appear to fuel higher participation.
On the other side of the spectrum are states where crypto activity is significantly lower than the national average, falling near the 1% mark.
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West Virginia: 0.84%
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Mississippi: 0.95%
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Kentucky: 1.10%
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Louisiana: 1.15%
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Alabama: 1.16%
These states tend to be more economically conservative, with smaller tech sectors and lower household incomes overall. Many residents in these regions traditionally lean toward established, lower-risk financial tools, and the infrastructure supporting digital assets may be less widespread.
Still, low crypto reporting doesn’t mean these states are uninterested. It’s more likely that residents are slower to adopt new financial technologies or participate in crypto activities that would require reporting on their taxes.
It’s also possible that smaller transaction sizes or basic holding activity simply don’t generate the tax events that show up in IRS data. What we see here is more a reflection of economic and cultural differences than a lack of awareness.
One of the most notable trends is how dramatically crypto adoption changed between 2021 and 2022. Many states saw participation spike during the 2021 bull run, when Bitcoin hit record highs and the broader crypto market surged. Enthusiasm was high and many first-time investors jumped in.
But as the market cooled in 2022, participation dropped sharply across almost all states. Washington is a prime example, with participation falling from more than 6% of filers showing crypto activity to under 3% the next year.
This shift suggests that many Americans are still treating crypto as a speculative investment rather than a long-term hold or everyday financial tool. When prices rise, participation jumps, but when prices fall, activity slows. That kind of pattern shows an asset class still heavily driven by sentiment and market cycles.
Income is another clear dividing line. High-income households earning $500,000 or more reported crypto involvement at several times the rate of middle-income families. This isn’t surprising, as households with more disposable income simply have a wider margin for speculative or experimental investments. Meanwhile, middle-income families may be more cautious, prioritizing stability and traditional investments over volatile digital assets.
Overall, the data demonstrates that while crypto has gained visibility nationwide, meaningful adoption is still concentrated in specific regions and demographics.
If you’re considering getting involved with Bitcoin or other cryptocurrencies, the study won’t give you a yes-or-no answer, but it does offer helpful context. People usually get into crypto when they have a financial cushion, a solid understanding of the risks and at least some comfort with digital platforms.
For many people, the most sensible strategy is to start small. Treat crypto as a supplemental part of your broader financial picture rather than a primary investment. This lets you explore the space without putting yourself in an uncomfortable position or risking money you need in the near future.
Ultimately, whether crypto has a place in your portfolio depends on your goals, your risk tolerance and the stability of your overall financial situation. For long-term investors looking to add crypto to their portfolio, the services of a fee-only financial advisor can help you make a more informed decision.
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This article originally appeared on GOBankingRates.com: 5 States Where Bitcoin Is Most Popular — and 5 Where It’s Not