News of big investments from major financial institutions into the digital assets space may have buoyed the cryptocurrency market recently, but to the general public, interest in cryptocurrency remains stagnant month-over-month. The latest CivicScience data tracking cryptocurrency activity show that 19% of U.S. adults have invested and 9% plan to invest, the same as in April.
Previous data indicated the mini banking crisis earlier this year damaged crypto’s outlook, while the looming question of regulation is further shaking things up, taking center stage after the collapse of FTX. Data from April uncovered that the majority of U.S. adults support federal government regulation of cryptocurrency, which had increased since the start of the year. Support for regulation was also growing among cryptocurrency investors and those intending to invest.
The most recent numbers show a slight decrease among the general public in support for federal regulation from April (down 4 points to 55%) – support decreased among current cryptocurrency investors (down 2 points), but increased to nearly half of all intenders (up 5 points), suggesting that government regulation may be a growing incentive for those who are on the fence about investing.
The SEC’s charges against exchanges Binance and Coinbase, arguing that cryptocurrency and its exchanges should be regulated as an investable security, brings into question the nature of cryptocurrency. Ongoing data tracking show that crypto-interested Americans prioritize cryptocurrency as an investment vehicle well above any other reason to invest. July results show that 29% see it primarily as a short-term investment, while an additional 28% value it as a long-term investment first. Just 13% total say its primary value is either a hedge against adverse economic conditions or independence from government-regulated financial institutions, while a mere 11% see it as a currency for transactions (n=1,449).
Investment opportunities are top of mind, but lack of trust in cryptocurrency in general is undoubtedly a barrier to new investment. Among those familiar with crypto, 22% say they have at least some level of trust in cryptocurrency – just 6% rate their trust as ‘high.’ Trust is far stronger among those who have experience with cryptocurrency, with nearly 1-in-5 investors saying they strongly trust blockchain digital currency. Those who intend to invest are far more skeptical, half as likely as investors to say they have a high level of trust in cryptocurrency.
Even so, the majority of investors and those who plan to invest hold low to no trust in cryptocurrency.
Those who think cryptocurrency markets should be regulated by the federal government are unsurprisingly less likely to trust cryptocurrency – just 16% have medium or high trust, compared to 43% of those who are against regulation.
Interestingly, trust in banks correlates with trust in cryptocurrency, despite cryptocurrency’s appeal as a financial tool outside of traditional institutions. Trust in banks was rattled as the result of the Silicon Valley Bank, Signature Bank, and other bank collapses. By July, CivicScience data show 65% of U.S. adults report medium to high trust in banks (n=3,090), up from 62% in May. Those who have high trust in banks are significantly more likely to also hold ‘high’ trust in cryptocurrency. This could be good news for banks and credit card companies, such as Mastercard, looking to venture further into the crypto and blockchain space.
Despite support for regulation cooling since the spring, the latest consumer opinions continue to point toward consumer acceptance of potential cryptocurrency regulation over the status quo. Check back for continued updates from the CivicScience InsightStore. Get in touch to learn more.