Crypto faith strong across America despite global slump: survey

Global confidence in crypto among retail customers 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.

Nevertheless, faith in the asset class is still relatively high, according to research carried out on behalf of the crypto exchange Bitstamp.

In a recent survey involving 28,000 respondents in 23 countries, it was shown that trust in the crypto sector has decreased by 3% among institutional types, from 70% in Q1 to 67% in the subsequent period.

The percentage of retail investors globally who found crypto trustworthy also fell – from 67% to 65%. However, US-based respondents revealed a bump in confidence, from 61% to 73%.

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

The number of retail investors actively investing in the area continued to increase from 42% to 61% quarter on quarter, an increase of almost a fifth.

In fact, while confidence was shaken on a global scale, retail respondents across most of America showed more faith in cryptocurrencies last quarter.

“In fact, Canada was the only country to see confidence in cryptocurrency fall slightly below 50% in Q2 vs. Q1 among retail respondents,” the report said.

“Every other country in the Americas saw confidence in cryptocurrency still high at or above 68% with countries like Brazil at 77%, Chile at 69% and Mexico at 70%.

Bitstamp’s crypto survey reflects greater market caution

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

Bitcoin and Ether are down nearly 60% year-to-date after prices fell in the second quarter.

That appears to be eating into crypto investment products, which have seen volumes fall across the board, hitting two-year lows as August outflows continued.

Trading volume for crypto exchanges across major exchanges, including Coinbase, shows that institutional players far outweigh retail trading compared to crypto’s previous bull run in 2017, according to Messari analyst Tom Dunleavy.

“While the markets may seem gloomy in this bearish environment, we are still seeing strong interest from sophisticated investors across Asia and the Americas looking to deploy capital in the space,” Daniel Kim, chief investment officer at FBG Capital told Blockworks in an interview.

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

Much of the market remains concerned about inflation after historic money printing during the pandemic, making it difficult for investors to gauge the health of both equity and crypto markets.

“Inflation is so high for a number of reasons – energy and oil prices have risen 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 large amount of dollars has caused inflation to spiral.

“The one thing we do know is that, historically, such big moves often provide a good time to buy,” Ashmore wrote.

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