SSo far in 2022, cryptocurrency prices have given investors a bumpy ride, hackers have stolen more than $1 billion worth of crypto since we rang in the new year, and President Joe Biden has stepped up its plans to regulate digital currencies.
It is not shocking, then, that confidence in crypto generally fell between January and April this year, according to data released Tuesday by research firm Morning Consult.
Some coins have suffered more from a decline in confidence than others. Morning Consult reported that among bitcoins, dogcoin and ether, confidence in ether – the newest of the bunch, launched in 2015 – fell the most. Trust in bitcoin declined the least. (The drop in trust for dogecoin mirrored the same 8 percentage point drop in trust that the cryptocurrency experienced overall.)
People may not believe in the credibility of crypto, but that doesn’t stop them from invest in it. DDespite the large general decline in trust, the share of adults who mentioned they plan to buy a cryptocurrency the following month (24%) was virtually unchanged from January (26%). Additionally, around 21% of respondents who said they are likely to buy crypto in the next month explicitly stated that they do not trust it.
Does Crypto Even Need Your Trust?
Even with plummeting faith in crypto, the digital currency world works as expected. Charlotte Principato, financial services analyst for Morning Consult, wrote in a summary of findings on Tuesday that no one should be surprised that crypto ownership remains stable.
She said that by design, crypto and blockchain are sort of “trustless” technologies that don’t operate under centralized authority — “not in the traditional sense, but trustless in that sense.consumers do not need to trust it because they can verify ownership and transactions themselves,” Principato added.
Many crypto enthusiasts subscribe to this notion. Exchange platform Coinbasefor example, said that because the technology underpinning crypto transactions encrypts and anonymizes payments while cutting out middlemen like banks, people don’t have to trust the recipient – or typical financial institutions at all – for a transaction takes place securely.
Crypto-skeptics, however, have undermined these claims. A study 2018 published by a University of Michigan law journal found that, rather than being trustless, crypto forces people to supplant their trust in less regulated and less accountable parties. As a result, “everyone is always vulnerable; predators are everywhere, and the slightest mistake is enough to create disaster,” writes its author.
Yet, to be widely adopted, more people need to trust crypto as long as they believe it is a profitable investment. As it stands, Morning Consult said 19% of American adults own cryptocurrency. (The White House puts that figure at around 16%, or about 40 million people.)
According to data from Morning Consult, two major obstacles prevent it from wider adoption:#1, most people don’t understand crypto, and #2, they don’t trust it either.
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