A Growing Number of U.S. Adults Invest in Cryptocurrency Despite Risks

A recent study on behalf of Protocol by The Harris Poll found that while cryptocurrency is growing in popularity, most still view it as a risky investment. The study also found that most cryptocurrency traders plan to invest more money into the growing  market, and that advertisements for crypto-adjacent investment brands drive awareness of the brands more than intent to use their services.

Most U.S. adults are aware of cryptocurrency, and a notable sum has invested. Most current and previous cryptocurrency traders say they plan to invest more money in cryptocurrency in the coming years despite the market’s current instability.

Cryptocurrency has become a major talking point in 2022, and decentralized currencies have gone mainstream. Nine in ten (93%, up 5 percent points from June 2021) adults say they at least have heard the term cryptocurrency (i.e., are aware of cryptocurrency) while over half (54%, up 5% from June 2021) say they are familiar with cryptocurrency.

A notable number of U.S. adults have entered the cryptocurrency market themselves. Three in ten (28%, up 7% from June 2021) adults currently trade cryptocurrency. Another 12% of adults previously traded cryptocurrency but do not anymore. Six in ten (57%)  adults say they have never traded cryptocurrency.

Most current  traders report that they plan to invest more into cryptocurrency, despite the unstable market. The overwhelming majority (93%) of current cryptocurrency traders say they are likely to buy or trade more cryptocurrency in 2022. A majority of previous traders report that they will reenter the market within the nest year, with seven in ten (67%) of  saying they are likely to buy or trade cryptocurrency in 2022. One in five (19%) of those who have never traded cryptocurrency say they are likely to buy or trade cryptocurrency in 2022.

Perhaps unsurprisingly, about the same share of current cryptocurrency traders (94%) plan to buy and trade more cryptocurrency in 2023. Four in five (78%) of previous cryptocurrency traders plan to buy and trade cryptocurrency in 2023. Three in ten (27%) of those who have never traded cryptocurrency say they are likely to buy or trade cryptocurrency in 2023. This could illustrate that those in the cryptocurrency investment space see a potential for long term profit. Common mantras for cryptocurrency traders is having “diamond hands” and riding a coin “to the moon.” Traders use these terms to dissuade others from selling their currencies during a volatile time in the market, and instead selling their coins at the peak of their value. The terms were even featured in a Super Bowl ad by the investment company eToro. These findings could illustrate a cultural mindset of the cryptocurrency space: despite market volatility, profit will be made in the long run.

Most of those who have heard of cryptocurrency view it as a risky investment; current and previous traders report this more frequently than those who have never traded cryptocurrency. However, a majority still agrees that there is enough information available to decide how to trade.

Three quarters (74%) of those who say they have heard of cryptocurrency agree that cryptocurrencies are a risky investment. Cryptocurrency traders acknowledge the risk associated with trading crypto, with the number climbing to 79% for those who currently trade cryptocurrency and climbing even higher to 82% for those who previously traded cryptocurrency (compared to 71% of those who have never traded cryptocurrency).

That said, half (51%) of those who have heard of cryptocurrency report that there is enough publicly available information to decide how to buy and trade cryptocurrency. Again, this number rises for those who currently trade cryptocurrency (76%) and those who previously traded cryptocurrency (69%).

Crypto advertising is viewed as effective in encouraging people to trade – though it did more to boost awareness instead of intent during the Super Bowl.

Three in five (58%) of those who have heard of cryptocurrency agree that advertisements about cryptocurrency do a good job at encouraging more people to trade cryptocurrency. Current cryptocurrency traders agree with this statement more frequently (82%), as do previous cryptocurrency traders (74%).

Looking specifically at the Super Bowl, among those who indicated they had watched ads during the game, prompted recall for crypto/trading brands was 34% for Crypto.com, 28% for E-Trade, 25% for Coinbase, 21% for FTX, and 11% for eToro.

When those who remember watching any listed ad during the Super Bowl were asked to indicate their favorite, among crypto/trading brands, E-Trade won (3%) followed by Crypto.com, FTX (1%), Coinbase (1%), and eToro (<1%).

(Note, ad watchers could only select their favorite ad from a list of the ads they claimed to recall watching during the game. The potential size of this list could have been as large as 81 ads with an N/A option for those who claim they did not have a favorite ad.)

Some crypto brands were successful at boosting awareness among Americans over the Super Bowl weekend. According to QuestBrand, compared to before the game, both Crypto.com and FTX experienced increases in awareness (i.e., those who claim to have heard of the brand) among the general population by 4.4 and 6.4 percent points, respectively, after the game aired. This could be a major victory for Crypto.com and FTX, as the cryptocurrency space is becoming increasingly saturated by up-and-coming brands seeking to capitalize on the new market.

However, consideration for both brands (i.e., those who say that they are possibly or absolutely likely to use the brand in the future) remained relatively flat. After the Super Bowl, about a quarter of Americans said they would consider using Crypto.com (26%), and 14% said the same about FTX. These were changes of <1% from before the game.

Of the brands surveyed, Coinbase, Robinhood, and Crypto.com are currently the most used cryptocurrency trading sites, and they are also the most associated with trading cryptocurrency.

A quarter (26%) of U.S. adults say they currently use Coinbase – compared to the 21% who use Robinhood, 16% who use Crypto.com, 9% who use SoFi, who 3% use FTX, and 3% who use eToro.

Seven in ten (71%) current cryptocurrency traders currently use Coinbase – compared to the 45% who use Robinhood, 42% who use Crypto.com, 19% who use SoFi, 8% who use FTX, and 4% who use eToro. Only 5% of current cryptocurrency traders use none of these brands.

Those who have heard of cryptocurrency most associate cryptocurrency trading with Crypto.com (55%), Coinbase (52%), and Robinhood (32%).

Similarly, among those currently trading cryptocurrency, the surveyed brands most associated with cryptocurrency trading are Coinbase (76%), Crypto.com (69%), and Robinhood (47%).

While the cryptocurrency investment assistance market (e.g., digital wallets, investment platforms) is becoming increasingly crowded, Coinbase, Robinhood, and Crypto.com are leading the way in use and association with cryptocurrency trading. A defining characteristic of most cryptocurrency trading brands is the move away from treating crypto as a functional currency used to purchase items (such as NFTs), and the move towards viewing crypto as a speculative investment. Coinbase and Crypto.com seek to demystify cryptocurrency by providing explainers and trading tips to new users. Robinhood, an established traditional stock trading app, has more recently moved into the cryptocurrency investment market. They promise no exchange fees for cryptocurrency transactions (something their competitors do not do).

The cryptocurrency investment assistance market is becoming more saturated, but there may be room for newcomers. Brands that seek to move into the cryptocurrency trading space might find success by being an accessible face for cryptocurrency, and making decentralized currencies approachable for newcomers.

Methodology

The study on cryptocurrency trading was conducted online in the United States by The Harris Poll on behalf of Protocol during February 23-24, 2022, among 1,105 adults (aged 18 and older). The study on Super Bowl ad recall and favorability was also conducted online in the U.S. by The Harris Poll during February 14-15, 2022, among 1,184 adults (aged 18 and over). Data on brand awareness and consideration changes were part of a study conducted online in the U.S. by The Harris Poll via its QuestBrand from January 31, 2022, to February 15, 2022, among 11,347 adults (aged 18 and over).

These online surveys are not based on a probability sample and therefore no estimate of theoretical sampling error can be calculated. Figures for age, sex, race/ethnicity, education, region, and household income were weighted where necessary to bring them into line with their actual proportions in the U.S. population. Propensity score weighting was used to adjust for respondents’ propensity to be online. For more information, please contact Dami Rosanwo, Madelyn Franz, or Andrew Laningham.