Crypto Has a Trust Problem

The XandY Poll | U.S. National Adult Population | Nov. 2023

Abel Gustafson, Matthew Goldberg, & Carly Wolfer
April 2024

As cryptocurrency and blockchain technologies navigate regulatory changes and increasing government oversight, they also face growing turbulence in their relationship with the public. Following a series of high-profile scandals, “rug-pulls,” and security breaches, it is no surprise that many Americans are skeptical of not just the merits of the technology and the safety of their financial investments, but also of the individuals and organizations who lead the industry. Here, we summarize findings from our recent national survey that show the extent to which Americans trust or distrust specific types of decision makers within the crypto industry.

Fewer Than 1 in 4 Americans Trust Companies and the Government on Crypto

As shown below, very few Americans (24%) trust the exchanges on which cryptocurrencies are commonly traded, and only 23% trust the companies that develop crypto and blockchain technologies. Among this slim portion who say they trust these entities, most say they only “somewhat trust,” and far fewer say they “strongly trust.”

However, while only 1 in 4 Americans trust these entities, this does not mean that the remaining 3 in 4 distrust them. In fact, the most common response is just “Unsure.” Although distrust outnumbers trust by a large margin, there is still a large portion of the public who are either undecided, uninformed, or otherwise on the fence. 

Americans similarly report low levels of trust in government officials who are regulating crypto (23%) as well as governments who are transitioning to digital currencies (20%). This is a strong signal that alongside Americans’ lack of trust in the crypto industry is a lack of trust in the government to take the reins and shepherd this technology responsibly. In a separate article, we show that about half of Americans say there should be stricter regulations on cryptocurrency trades and transactions. Together, these findings show strong distrust and desire for more safety, but a lack of faith in the government to accomplish this.

Is Low Trust Just Because of Low Knowledge?

One possible explanation for the pervasive low levels of trust is that many Americans simply feel unaware or uncertain about this new technology, and their lack of knowledge is driving their fears. Shown in the figure below, we do see that trust in companies and government regulators is higher among Americans who are at least “moderately” or more familiar with crypto, compared to those who are not very familiar. However, even among those who say they are familiar, those who trust companies and government officials are still in the minority (only about 35%-40% trust them).

So What

The glaring trust problem is a bit ironic in the industry pioneering the (very real) benefits of trustless systems—where a core premise is the importance of not placing too much faith in centralized entities to manage or oversee the system. But the objective functional merits of any idea or innovation—including blockchain technologies—are not enough to guarantee successful adoption. Companies developing blockchain and crypto technologies must directly confront the reality of this fraught relationship with the public. This crisis of confidence needs to be addressed.

Mass adoption of new technologies is driven by public perceptions of value, risk, convenience, norms, and credibility. The path forward will largely be determined by how well major entities (companies, leading individuals, governments) engage in the relationship maintenance that is required to shift the narrative and repair public trust.

About The XandY Poll

Survey Methodology

The design, data collection, analysis, and reporting of this national survey were performed by XandY, an independent research and strategy firm. Exhaustive details of the scientific methodology of The XandY Poll can be found here. The following briefly summarizes key points of interest.

The survey responses were fielded from November 18 – November 21, 2023 using online recruitment methods to sample adult residents of the United States (N = 1,527). This survey used a nested quota sampling strategy to match U.S. Census proportions of age, income, race and ethnicity, gender, and political party affiliation. To further ensure the insights reported from these data closely resemble the U.S. population, the sample was weighted to match U.S. Census benchmarks.

Percentage points are rounded to the nearest whole number. When sums of two proportions are reported in text (e.g., “63% of U.S. adults say they either “strongly” or “somewhat” support…") we round the total value after summing. Sometimes, this creates an apparent error. For example, 41.4% + 20.4% = 61.8% which rounds to 62%.  But in the figure, the values are individually rounded (41% and 20%) so it might appear that 41% + 20% = 62%.

Margin of Error

Proportion statistics regarding the full national sample have an average margin of error of +/- 2 percentage points at the 95% confidence level. The margin of error in subgroups is determined by the subgroup size.

Citation

This paper and the insights it reports may be cited as:

Gustafson, A., Goldberg, M. H., & Wolfer, C. (2024). Crypto Has a Trust Problem. XandY. New Haven, CT. Retrieved from: www.xandyanalytics.com/crypto-has-a-trust-problem