According to a CNBC and Momentive study, Americans are substantially more wary about bitcoin following major disruptions in the digital asset market.
The study, conducted from the end of November to the start of December, revealed that about 60% of Americans consider the risk of crypto investments to be “high,” up from 45% in August of last year. Another 26% believe cryptocurrencies are moderately dangerous, while only 10% believe they are risk-free.
Many regulators and investors have expressed concern about cryptocurrency, a type of decentralized digital money that can be moved between users’ virtual accounts. Younger Americans are more inclined to invest in the assets: around 38% of Generation Z, defined as those under the age of 25, feel cryptocurrency trading is extremely dangerous, while 80% of Baby Boomers, defined as those over the age of 58, say the same.
Over the last two months, the industry has been particularly volatile, with FTX, a cryptocurrency exchange created by Sam Bankman-Fried, suffering a liquidity crisis when customers discovered that sister trading firm Alameda Research reportedly took customer money off the site to make bets. The firms declared bankruptcy last month, and Bankman-Fried, who has been portrayed in the media as a crypto wunderkind, is now under criminal investigation by the SEC.
Younger Americans are also more likely to possess digital assets; nearly 15% of Millennials, those aged 26 to 41, and 12% of Generation Z claimed they held cryptocurrencies, compared to fewer than 5% of Baby Boomers and the Silent Generation.
According to CNBC, the whole crypto has lost over $2 trillion since last year. Bitcoin’s price has dropped 64% since the start of the year, while the Dow Jones Industrial Average has dropped around 7%.
Institutional investors have put money behind blockchain initiatives but are wary of betting on cryptocurrencies. JPMorgan Chase CEO Jamie Dimon has expressed concern about “terrorist funding, tax evasion, sex trafficking,” and other ways that digital assets facilitate illegal operations. “Why do we let this to happen?” he said, comparing bitcoin tokens to “pet pebbles” and stressing that sector contagion will have negligible impacts on the broader market.
Earlier this year, crypto businesses Voyager and Celsius filed bankruptcy, while others such as Genesis have hinted at the prospect of bankruptcy. BlockFi, a lending platform, declared bankruptcy just days after FTX was declared insolvent.
Current FTX CEO John Ray III, a lawyer who defended plaintiffs following Enron’s demise, stated that Bankman-empire Fried’s was the greatest example of mismanagement he had ever seen. “I have never seen such a total collapse of corporate controls and such a total lack of trustworthy financial data as occurred here,” Ray stated in court records.
Comments are closed.