After a series of crypto-collapses, scandals and bankruptcies, Americans’ views on cryptocurrency have soured sharply, with the CNBC All-America Economic Survey finding a majority favoring strong regulation.
The survey shows 43% of the public with a negative view of cryptocurrencies, up from 25% in March. The percentage with a positive view plummeted to just 8% from 19%, and those who are neutral fell almost in half to 18% from 31%.
It’s a dramatic fall for an investment that was touted as its own asset class and had a celebrated coming-out party on the global stage with multiple Super Bowl ads and celebrity endorsements. That popularity attracted many ordinary Americans to crypto and the survey shows 24% of the public invested in, traded or used cryptocurrency in the past, up from 16% in March.
The survey of 800 Americans nationwide was conducted Nov. 26-30 and has a margin of error of +/- 3.5%. (March results for crypto are from an NBC News survey.)
According to the survey, 42% of crypto investors now have a somewhat or very negative view of the asset, in line with the 43% result for all adults in the survey. The main difference: 17% of crypto investors are “very negative” compared with 47% for non-crypto investors.
But it could still be a problem for crypto recovering its credibility since reputation looks to be central to its valuation.
“It’s a 90% retail market, which means the sentiment of mom-and-pop investors really matters,” Brian Brook, the CEO of Bitfury, and the former comptroller of the currency, said at this week’s CNBC Financial Advisor Summit. “And so when you read FTX stories on the front page of the Wall Street Journal, literally every day for the last 30 days…what it does is for relative new entrants, they get scared. And so as a result, liquidity is thinner than it would have been and people’s willingness to invest is lower.”
Whether a respondent is invested in crypto or not, they are likely to favor regulating it as stringently as stocks or bonds. The survey found 53% of the public saying crypto should have the same or greater regulation and oversight as stocks and bonds, that includes 21% of all adults and 16% of crypto investors who want more regulation.
Negative views on crypto come at the same time as the public has soured on stocks. Just 26% say now is a good time to invest in equities, down two points from last quarter’s survey and the most pessimistic level registered in the 15-year history of the survey. 51% say it’s a bad time to invest, the third highest in the survey’s history, bested only by the downbeat results of the prior two surveys.