FTX founder Sam Bankman-Fried is once again capturing headlines as his trial is underway – in which he faces multiple counts of fraud and conspiracy charges related to FTX’s bankruptcy last year. At the time, FTX was one of the world’s largest crypto exchange platforms and its collapse made quite an impact on consumer confidence toward investing in cryptocurrencies. Where do Americans stand on trust in cryptocurrency now that the trial has thrust crypto back into the limelight?
According to the latest CivicScience data, 23% now say they’ve invested in crypto (among those aware), up two percentage points this month from September tracking. Can that growth maintain with the trial in the spotlight? One-fifth of U.S. adults are keeping tabs on the Bankman-Fried trial, and a further 9% say they aren’t currently following the events but do plan to catch up at some point. Perhaps most alarmingly for the crypto industry, however, a staggering 62% say they feel ‘less likely’ to invest in crypto in the wake of cases like the Sam Bankman-Fried trial – compared to just 5% who say they’re ‘more’ likely to invest.
Viewed through the lens of past cryptocurrency involvement, 33% of respondents who have previously invested in crypto, along with one-quarter of potential investors, express diminished enthusiasm for future investments following the trial. The recent FTX scandal has further cemented the convictions of 74% of those who had previously shown no interest in digital currencies and now appear even less likely to consider investing due to the trial and similar cases.
As the industry looks to move on from the FTX scandal, ETFs potentially offer a new way forward for crypto investment. A late August U.S. Court of Appeals ruling opened the door for Bitcoin exchange-traded funds (ETFs), which would give investors cryptocurrency access without requiring possession of the coins themselves and allow them to be traded through the traditional stock exchange. Major firms like BlackRock lept into action following the ruling and submitted applications for spot Bitcoin ETFs, approval of which is rumored to be on the way within months.
Nineteen percent of U.S. adults say they feel it’s at least ‘somewhat likely’ they would take advantage of the new ETFs if/when regulators approve them. A majority (57%) of those who’ve made crypto investments at some point previously also show an interest, along with 47% of crypto intenders. The emerging ETF route is even attracting around 7% of those who have never invested in crypto before and had no interest in doing so.
Although Bitcoin ETFs could provide a new entry to crypto investing for some, even prospective Bitcoin ETF investors are left feeling uneasy regarding the broader crypto landscape, in part due to cases like that of Sam Bankman-Fried. CivicScience data show those considering Bitcoin ETFs are fairly divided on future crypto plans in response to the SBF trial – while 27% say they still feel ‘more likely’ to invest in crypto, like the Bitcoin ETF, another 28% report they’re feeling ‘less’ likely. Moreover, an additional 11% are not sure and could still be swayed either way.
Though hopes are high for Bitcoin ETFs, the scars of FTX run deep and will continue to contribute to the volatility of the crypto market.
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