Sam Bankman-Fried, founder and chief executive of crypto trading platform FTX. Despite a blitz of media attention and marketing spots, the number of people who’ve invested in crypto during the last year hasn’t grown. (Jeenah Moon/Bloomberg News)
Over the past year, crypto companies like FTX, Coinbase and Crypto.com have shelled out tens of countless dollars to attract new customers. “Fortune favors the brave,” Matt Damon famously said in a Crypto.com TV spot as he tried to induce Americans to open their digital wallets.
Now a core metric of how successful these were has been returned, and experts say it’s an eye-opening one: not successful at all. The number of people who invested in crypto hasn’t expanded since last September prior to the push began, in accordance with a fresh study led by Pew Research Center.
The results, released Tuesday, build off an original survey in September. In the past, Pew researchers asked 10,371 Americans if they have “ever invested in, traded, or used a cryptocurrency.” Some 16 percent said they had.
Last month, the nonprofit asked another sample group — slightly smaller, at 6,034 Americans — the same question. The amount hadn’t grown, with the same 16 percent saying they’d at some point invested or traded in the alternate currency.
The results suggest that, despite numerous splashy campaigns by crypto interests, the truly amazing most Americans remain immune with their sales pitches.
“It’s pretty striking that for all the spectacular commotion around crypto within the last few year, the number of people who invest or trade in crypto didn’t budge,” said Lee Rainie, Crypto marketing Pew Research Center’s director of internet and technology research, who spearheaded the study. “Attempts to bring in new buyers to the marketplace didn’t seem to go the needle at all.”
The finish of 2021 and beginning of 2022 saw a flurry of recruitment efforts as crypto firms experimented with draw retail investors in to the fold — the market’s long-term health in large part utilizes new players willing to register for exchanges and buy digital coins.
Several weeks after Damon’s commercial debuted in October, Crypto.com announced a naming-rights deal for Los Angeles’s Staples Center. By February the push was in full effect. Three trading platforms — Crypto.com, FTX and Coinbase — each bought Super Bowl airtime which was reportedly choosing $6.5 million per 30 seconds.
“That the cryptocurrency space, despite a ton of advertising, has run out of new suckers is not totally all that surprising if you ask me,” said Nicholas Weaver, a computer-security expert from the University of California at Berkeley who has often raised both a financial and ethical case against crypto investment. “Although there’s a sucker born every minute, that’s still a small pool of suckers.”
“While it is a bit surprising that individual adoption in the US will be flat, I could say that’s not the trend we are seeing in other markets,” Kim Grauer, director of research for Chainalysis, the crypto and blockchain data company, said in a email. “Inside our recent research, we’re continuing to see increased grassroots adoption globally, and especially in emerging markets.”
Grauer added that in the United States, “which has a more aged crypto economy and where adoption has stabilized, I be prepared to see a fresh wave of new entrants into the room as financial institutions start to roll out the crypto products they’ve announced.”
And not totally all analysts were embracing the underlying truth of Pew’s findings. “I question the investigation,” said Edward Moya, senior market analyst at crypto trading and research company Oanda. “What I’ve seen during the last year is a very diverse group of people — lawyers, nurses, doctors, professors — showing extreme interest in crypto, especially at the start of 2022, when most of them bought set for the initial time.”
Crypto enthusiasts say studies can underrepresent crypto investors, because not everybody wants to share with a questioner they have invested and because studies don’t look for pockets of these most likely to invest. Rainie said Pew took rigorous steps to achieve proportional representation across various racial, gender and economic groups.
Industry leaders are warning that new pools of investors might be even harder to locate in the coming months. On an earnings call this month, the publicly traded crypto exchange Coinbase, which ended 2021 with 11.4 million monthly active users, said it expected to finish the season with between 7 million and 9 million monthly active users.
Moya said that even when retail investors drop off in the wake of the recent crash, the crypto markets might be fueled by institutional investors, who’re more likely to buy in after having a crash.
The Pew study also examined demographic data and found so it hadn’t changed much within the last year either. As in September, adults over 50 were only about one-fourth as likely to invest in crypto as adults under 30, while men were 2.5 times much more likely than women to put profit crypto.
The study also found that the marketing campaigns didn’t do much to heighten general crypto awareness. Last September, the percentage of those who said they’ve heard “nothing at all” abut cryptocurrency was at 14 percent. By come july 1st, after every one of the media attention, the ranks of the crypto-ignorant had shrunk by only one percentage point, to 13 percent.