Noise and reputation: The popular view on crypto
Crypto has captured the attention of the world, with more than half (56%) being at least curious about it. What was once a small, niche, and underground subsect of finance is now the subject of podcasts, front-page news, and dinner-party conversations. So much noise surrounds the crypto market that it can be difficult to discern what is real, what isn’t, or the difference between a rational response and irrational doom-mongering. But crypto’s future depends on cutting through this noise and creating a clearer picture of its current role in society and its potential for the future.
The impact of scandal
It’s no secret that the realm of crypto has seen unrest from several scandals in recent years. As the year 2022 unfolded, the crypto landscape experienced a rough period of scandals with the collapse and bankruptcy of FTX and CEO, Sam Bankman-Fried creating the peak in November. After the arrest of Bankman-Fired with criminal charges of fraud, FTX also announced $415 million was lost to hackers in January 2023.
The aftermath has left a lasting impact on consumer views. Our findings indicate that those aware of the FTX story approach future dealings with crypto providers more cautiously (16%). However, many consumers (20%) now hold a more cynical outlook on the overall industry. Although, it’s worth noting that 15% of consumers said the scandal had made them more curious about the nature of the market.
An unfair reputation
It is worth noting that the scandals are not fundamentally related to any weaknesses in the underlying blockchain technology, but rather a result of human behaviours and bad actors. The survey highlights a notable gap between those who perceive the positive features of crypto and those who focus more on the negative. The data reveals that consumers perceive the benefits of cryptocurrencies are inevitably outweighed by criminality and fraud.
Charles Guillemet, Chief Technology Officer at Ledger, stated that the “distrust can be attributed to a lack of knowledge about digital assets’ core benefits.” Guillemet also suggests that misconceptions have arisen due to the failures of centralised players, leading to the belief that digital assets offer no utility.
More than 500 exchanges and nearly 23,000 coins are in circulation, with major financial institutions like Fidelity, Goldman Sachs and JP Morgan entering the crypto landscape. Innovators like PayPal, Revolut and Square are also working to bring cryptocurrencies to a broader audience. With this growth, over time the concerns of crypto will inevitably be less.
Despite the negative spotlight on crypto, it’s essential to recognise that blockchain technology continues to make progress. The short 15-year history of crypto is still impressive with exceptional growth.
Institutional investors have taken notice, with a significant percentage now holding crypto assets and seeing them as a valuable addition to investment portfolios. In developing economies, crypto’s role in facilitating cross-border payments efficiently and cost-effectively is rising in popularity.
The crypto industry faces reputation challenges, largely stemming from the actions of a few bad actors. While these issues have resulted from rapid financialisation, they’re not inherent weaknesses in blockchain technology itself.
To improve crypto’s image, the market must distance itself from criminal associations. Regulatory measures are essential to protect consumers and maintain trust. The industry's potential to innovate across various sectors remains strong, and with the right security measures, adoption is expected to surge.
Reasons for hope
Despite setbacks and scepticism, consumer interest in crypto remains strong, with many eager to explore personal crypto investments in the near future. The appeal of decentralised and accessible financial solutions continues to attract individuals from diverse backgrounds. However, Ian Taylor, Head of Crypto and Digital Assets at KPMG suggests that “there does need to be some kind of framework to protect against consumer harms”.
Cryptocurrency is seen as a powerful force for financial democratisation, even as its challenges persist. With the right measures in place, the path of crypto adoption appears poised for exponential growth.
To read the rest of the report and understand what the industry can do to secure its future you can download the full report here.