Despite the crypto winter, 75% of crypto holders are confident about the future of the industry – Paxos

Get all important market news and expert opinions in one place with our daily newsletter. Receive a comprehensive summary of today’s top stories straight to your inbox. Sign up here!

(Kitco News) – Ask any crypto follower and they will tell you that 2022 was a year to forget for the crypto market as the high-profile collapses of Terra and FTX initiated contagion shock waves that resulted in more than $2 trillion in value being lost from the the total market capitalization of crypto.

Despite this fact, consumer trust and confidence in the crypto industry remains high, according to the results of a survey conducted by Paxos, a regulated blockchain infrastructure platform specializing in the issuance of stablecoins.

Paxos’ purpose in conducting the survey was to “find out how the 2022 crypto winter and major industry fallout affected consumer behavior and trust in the crypto ecosystem.”

The survey was conducted from January 5 to January 6 and included 5,000 respondents aged 18 or older who live in the United States and have a combined household income of over $50,000. The survey was limited to those who currently have a bank account and have made at least one cryptocurrency purchase in the last three years.

Of those surveyed, more than 75% indicated that they are very confident or somewhat confident about the future of cryptocurrency, which is similar to the findings of the 2022 survey. “Additionally, 72% of respondents reported that they are slightly or not at all concerned about the volatility of the crypto markets seen over the past year,” the report said.

Not only did the events of 2022 fail to dampen the long-term outlook for crypto holders, some saw it as a good time to enter the market, as 27% of respondents indicated they bought crypto for the first time last year.

Confidence in centralized entities remains high

Despite the bankruptcy of FTX and several other high-profile crypto companies – including Celsius, Voyager Digital, BlockFi and Genesis – crypto owners still rely on centralized entities to hold digital assets on their behalf, with 89% of respondents reporting that they trust banks, crypto. exchanges and/or mobile payment apps to hold crypto.

Indeed, crypto consumers want their banks to become more involved in the crypto ecosystem, as 75% of respondents said they were likely or very likely to buy crypto from their primary bank if offered, a 12% increase from last year’s survey results . “Additionally, 45% of respondents reported that they would be encouraged to invest more in crypto if there was more mainstream adoption by banks and other financial institutions,” Paxos wrote.

While many people think of companies like Coinbase when it comes to buying crypto, two of the top three platforms crypto owners use to buy crypto – PayPal (31%) and Robinhood (26%) – are non-crypto-focused fintech companies.

“Banks have a significant untapped opportunity to enter the market and meet the needs of existing customers by expanding their offerings to support digital assets,” the report said. “Not only would these services satisfy growing demand, but they would also result in higher engagement. Of the survey respondents who bought crypto in the last year, 68% made purchases at least 1-2 times a month.”

Driving motivations behind crypto investments

When it comes to the reason respondents are interested in cryptocurrencies, the survey found that the most cited reason was as a long-term investment (52%), and three of the five most desired use cases involve daily financial transactions, including payments and transfers.

Top five reasons respondents are interested in using crypto. Source: Paxos

Aside from serving as a long-term investment, the other popular reasons to pay for goods or services include (42%), credit card loyalty rewards (38%), day trading (36%) and sending money to friends or family (34%). The survey also found that users want mainstream financial service providers to offer products and services that support crypto.

“This presents a huge opportunity for companies to enable crypto purchases of goods from merchants and crypto payments between friends and families,” Paxos said. “The mainstream adoption of crypto could have a flywheel effect with 40% of respondents saying they would be encouraged to invest more in crypto if more merchants accepted crypto payments.”

A final area where respondents want additional support is with crypto education, as 37% of respondents said they would be encouraged to invest more in crypto if more education was available.

“This year’s survey results confirmed that the crypto market is undeterred by ecosystem volatility and the collapse of FTX and Alameda Research,” Paxos wrote. “Consumers want greater accessibility to crypto and more extensive integration into everyday financial transactions, including those supported by banks and fintechs.”

“As interest in crypto continues to grow despite market headwinds, helping consumers engage with cryptocurrencies – a clear desire indicated by this year’s survey respondents – could significantly contribute to the long-term business models of financial services companies,” Paxos concluded .