On Tuesday, El Salvador officially became the first country in the world to adopt Bitcoin as a national currency (in addition to U.S. dollars, which had already been the country’s primary currency).
While ensuring its population that government pensions, pay, and other national benefits would still be paid in traditional currency, the Salvadoran government’s move marks a significant change in the potential for cryptocurrency technology to be used as an actual currency rather than a speculative investment, which has been its sole function up to this point.
In a CivicScience survey of 3,800 U.S. adults, 17% believe this adoption adds legitimacy to cryptocurrency. While 56% don’t believe the move makes any difference, legitimacy has been the leading reason for hesitancy to invest in cryptocurrency, so any shift in sentiment could prove significant.
However, concerns over crypto’s legitimacy have been consistently dropping since May, perhaps foreshadowing El Salvador’s decision.
CivicScience has looked at demographics interested in cryptocurrencies and found that while the pool of interested investors is more diverse than expected, the truth is that everyone wants something a little different out of cryptocurrency as an asset.
When we look at crypto as a legitimate national currency we see that people’s overall interest and interaction in stock markets and more traditional financial instruments is a strong marker for how they predict crypto will continue to be seen, but perhaps not in the way you think.
For instance, people who predict online financial services will become prevalent, but not ubiquitous, in the next few years are most likely to think that the Salvadoran government’s decision to adopt Bitcoin will result in increasing legitimacy for the digital currency.
That same sentiment is strongest among those who only follow the stock market somewhat closely (as opposed to very closely or not at all closely).
These correlations suggest that those who are somewhat aware of or involved with financial instruments, but not overly so, are more bullish about El Salvador’s economic decision-making and its larger impact on digital currency adoption worldwide.
Perhaps knowing more about cryptocurrencies, and fintech at large, inherently makes someone more hesitant about accepting crypto.
Most interestingly, individuals who self-report as bad at managing their money are most likely to feel optimistic about the growing legitimacy of crypto following Tuesday’s news.
In any case, while interesting for headlines, the tech introduces a level of risk in an already fragile economy, so El Salvador’s decision has been met with quick criticism from some financial experts. While the general population of Americans is softening to the idea of cryptocurrency as a legitimate financial instrument, the more informed respondents haven’t let go of their skepticism.
CivicScience will continue to check in with the growth of cryptocurrency into mainstream financial arenas as it continues to evolve.