Crypto Faith Strong Across Americas Despite Global Drop: Survey

Global trust in crypto among retail and institutional investors took a small hit in the second quarter of this year, according to a recent survey, a period marked by liquidity crises and high-profile collapses.

Still, faith in the asset class remains relatively high, shows research undertaken on behalf of crypto exchange Bitstamp.

In a recent survey involving 28,000 respondents across 23 countries, trust in the crypto sector was shown to have dipped 3% among institutional types, from 70% in Q1 to 67% in the following period.

The percentage of retail investors globally who found crypto trustworthy also dropped — from 67% to 65%. Respondents based in the US however revealed a bump in trust, from 61% to 73%.

An institutional investor was defined as an individual with control or major influence on the investment strategy of a client or company, Bitstamp told Blockworks. Retail investors, meanwhile, are those classified as being over 18 who’ve both heard of crypto and hold any type of investment.

The number of retail investors actively investing in the space still surged from 42% to 61% quarter-over-quarter, a rise of nearly one-fifth.

Indeed, while trust was shaken on a global scale, retail respondents across most of the Americas displayed more faith in cryptocurrencies last quarter.

“In fact, Canada was the only country that saw trust in cryptocurrency dip slightly below 50% in Q2 vs. Q1 among retail respondents,” the report states.

“All other countries in the Americas saw trust in cryptocurrency remain high, at or above 68% with countries such as Brazil at 77%, Chile at 69%, and Mexico at 70%.”

Bitstamp’s crypto survey reflects wider market caution

Ongoing macroeconomic factors, such as rising inflation and tightening central bank policy designed to curb it, have hammered risk-on assets like bitcoin and ether.

Bitcoin and ether are down almost 60% in the year to date after prices plummeted in the second quarter.

That would appear to be eating away at crypto investment products, which have seen volumes dip across the board, hitting their lowest levels in two years as outflows in August continued.

Crypto exchange trade volumes across major exchanges including Coinbase shows institutional players vastly outweigh retail when compared to crypto’s previous bull run in 2017, according to Messari analyst Tom Dunleavy.

“Although markets may seem bleak in this bearish environment, we’re still seeing strong interest from sophisticated investors across Asia and the Americas looking to deploy capital in the space,” Daniel Kim, director of investments at FBG Capital told Blockworks in an interview.

“We see some of our portfolio companies looking to make it easier for non-crypto native individuals to access and enter crypto,” Kim said. Bitstamp’s survey found the largest barriers to entry for both investor types last quarter stemmed from a lack of awareness, knowledge and sufficient industry regulation.

Much of the market is still concerned by inflation following historic money printing during the pandemic, rendering it difficult for investors to gauge the health of both equities and crypto markets.

“Inflation is so high for a variety of reasons – energy and oil prices have surged as a result of the Russian war and there have also been supply chain concerns,” Dan Ashmore, Chartered Financial Analyst at Invezz wrote in an email.

The increased supply of new money has been necessary to get the economy back on its feet, but the sheer amount of dollars has caused inflation to spiral.

“The only thing we know for a fact is that, historically, such large drawdowns often make for a good time to buy,” Ashmore wrote.

---

Get the news in your inbox. Explore Blockworks newsletters:

• The Breakdown: Decoding crypto and the markets. Daily.
• 0xResearch: Alpha in your inbox. Think like an analyst.