Following the Recent Crypto Carnage, Only 8% of Americans Currently Have a Positive Opinion of Cryptocurrencies
The results of the recent CNBC All-America Economic Survey were alarming, to say the least, as support for cryptocurrencies appears to be going down faster than the Titanic.
Among all Americans, respondents with a negative view of the industry grew from 25% in the March survey to 43% in the latest CNBC All-America Economic Survey. Meanwhile, those with a neutral view fell from 31% to 18%. Finally, only 8% of people had a positive opinion, down from 19%.
The results from crypto investors showed that they support the industry more than non-investors, with only 17% of crypto investors holding a negative opinion, compared to 47% of non-investors. The changing opinions are mainly due to the industry’s questionable reputation.
2022 will likely go down as the year that cryptocurrencies went the way of the Beanie Baby. Once lauded as a generational investment opportunity, cryptocurrencies exploded in popularity over the last few years. Every few weeks, it seemed, a new cryptocurrency entered the market, each with ever more fantastical claims of return on investment.
Many of these coins were introduced as little more than a joke, only for them to catch on and explode in value. Look no further than Dogecoin (DOGEUSD), which has repeatedly been mentioned (pumped) by Elon Musk and other internet celebrities. Originally based on an internet meme, Dogecoin rose to $0.64 at its height before plummeting; today, Dogecoin trades under $0.10.
Moving beyond the “currency” part of the cryptocurrency phenomenon, we arrive at non-fungible tokens (NFTs). While cryptocurrency is supposedly an actual currency that can be used to buy goods and services, NFTs are basically digital trading cards with no value other than what the community ascribes to them. Once the general public began to realize that NFTs served even less actual purpose than cryptocurrencies, the backlash was swift and severe. Today, trading in NFTs is down more than 90% from the peak.
Perhaps no single event has done more to harm the reputation of the cryptocurrency industry than the ongoing FTX Trading Limited scandal. The cryptocurrency exchange and its former CEO, Sam Bankman-Fried (commonly stylized SBF, in a sign of the celebrity he had managed to obtain), have been all over the news recently following revelations that the company funnelled hundreds of millions of dollars to a shell company, Alameda Research, run by SBF and his former girlfriend. Unable to satisfy a tumult of withdrawal requests due to a lack of liquidity, FTX was ultimately forced to declare bankruptcy.
FTX is just one of many exchanges that have experienced liquidity issues after customers submitted withdrawals en masse. The industry is facing a situation where its poor reputation is causing investors to flee the system, which causes liquidity issues and breakdowns of exchanges, further harming credibility and driving more customers away.
Until these issues and others are solved, the industry will continue to suffer. It’s little wonder that, according to a recent CNBC All-America Economic Survey, less than 10% have a positive opinion of cryptocurrencies.
Bitcoin (BTCUSD) is currently trading at $17,802.60, down 0.02% on the day. YTD, BTC stock is down 62.7%.
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