Over the past year, crypto companies like FTX, Coinbase and Crypto.com have shelled out tens of millions of 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 they 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 has not expanded since last September before the push began, according to a new study led by Pew Research Center.
The results, released Tuesday, build off an initial survey in September. Back then, 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 number hadn’t grown, with the same 16 percent saying they had at some point invested or traded in the alternate currency.
The results suggest that, despite numerous splashy campaigns by crypto interests, the great majority of Americans remain immune to their sales pitches.
“It’s pretty striking that for all the spectacular commotion around crypto in the last year, the number of people who invest or trade in crypto didn’t budge,” said Lee Rainie, Pew Research Center’s director of internet and technology research, who spearheaded the study. “Attempts to bring in new buyers to the market didn’t seem to move the needle at all.”
The end of 2021 and beginning of 2022 saw a flurry of recruitment efforts as crypto firms attempted to draw retail investors into the fold — the market’s long-term health in large part relies on new players willing to sign up 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 that was reportedly going for $6.5 million per 30 seconds.
The ads were aimed at a broad swath of Americans — FTX, for instance, encouraged the game’s approximately 100 million viewers not to “be like Larry,” referring to the techno-skeptic star of the spot Larry David, and to instead invest in crypto.
The survey’s results validate the position of crypto-skeptics, who say the currencies are doomed because they lack inherent value and rely unduly on bringing in new investors to enrich the old ones.
“That the cryptocurrency space, despite a ton of advertising, has run out of new suckers is not all that surprising to 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 is a sucker born every minute, that is still a limited pool of suckers.”
The Pew study notes that “this lack of overall change comes despite strong attention to crypto in the news.”
A leading crypto-industry group maintained that the news is less dire than it might seem.
“While it is a bit surprising that individual adoption in the US would be flat, I can 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 an email. “In 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 mature crypto economy and where adoption has stabilized, I expect to see a new wave of new entrants into the space as financial institutions begin to roll out the crypto products they’ve announced.”
And not all analysts were embracing the underlying truth of Pew’s findings. “I question the research,” said Edward Moya, senior market analyst at crypto trading and research company Oanda. “What I’ve seen over the last year is a very diverse group of people — lawyers, nurses, doctors, professors — showing extreme interest in crypto, especially at the beginning of 2022, when many of them bought in for the first time.”
Crypto enthusiasts say studies can underrepresent crypto investors, because not everyone wants to tell a questioner they have invested and because studies don’t seek out pockets of those 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 could be even harder to find 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 year with between 7 million and 9 million monthly active users.
Moya said that even if retail investors drop off in the wake of the recent crash, the crypto markets could be fueled by institutional investors, who are more likely to buy in after a crash.
The Pew study also examined demographic data and found that it hadn’t changed much over the past 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 more likely than women to put money in crypto.
The study also found that all 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 this summer, after all the media attention, the ranks of the crypto-ignorant had shrunk by just one percentage point, to 13 percent.
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