Tracking Cryptocurrency Trends in Markets and Politics
The Consumer Cryptocurrency Confidence Report 2024 focuses on crypto ownership and adoption, while also incorporating political perspectives to inform consumers, managers, and policymakers on the evolving crypto landscape. This survey-based initiative was led by Wharton marketing professors Cait Lamberton, David Reibstein and John Zhang, and Martin Paul Fritze of Ludwig Maximilians University of Munich. It expands upon the insights derived from the Consumer Cryptocurrency Confidence Index, which was developed last year and is the first longitudinal measure designed to capture consumer perceptions and comfort with the cryptocurrency market.
Along with measures of confidence in cryptocurrency, the Consumer Cryptocurrency Confidence Index (c3i) captures a range of consumer perceptions and beliefs about crypto.
Linkage between c3i and prices:
The Consumer Cryptocurrency Confidence Report 2023 introduced the Consumer Cryptocurrency Confidence Index, which is designed to track the driving forces behind cryptocurrency prices. The report, based on a consumer survey in the U.S., identified strong long-term correlations between the c3i and cryptocurrency prices, particularly for leading coins like Bitcoin and Ethereum.
Rising confidence levels in crypto:
The rising trend in confidence in cryptocurrencies continued between the first and second reports. The survey also found growing confidence in crypto, reflected in increasing ownership rates and its expanding use, both online and offline. The authors anticipate a continued rise in confidence on the mainstream applications of cryptocurrencies.
Crypto demographics:
A third of survey participants (aged 25-44) reported owning cryptocurrencies. Their key traits: heterogeneity in consumer attitudes and behaviors towards crypto; demographic differences, for instance, with men generally expressing more confidence in cryptocurrencies compared to women; and crypto being perceived as a potential online payment method, despite its volatility.
Greater Clarity on Crypto Trends
The Cryptocurrency Confidence Report 2024 builds on the 2023 report in several ways. Most importantly, it analyzed the The Consumer Cryptocurrency Confidence Index against the major cryptocurrency Bitcoin, and found a close correlation between the two. Next, it benchmarked the c3i against another existing crypto index, the Fear & Greed Index for Bitcoin (FGI), which reflects a combination of social media chatter, volatility, and market volume. The analyses underscored the importance of directly capturing consumer sentiment towards crypto.
The Consumer Cryptocurrency Confidence Index (c3i)
“Aside from single-shot surveys, we know very little about how consumers – the people who will ultimately determine whether crypto becomes a commonly used tool in the market – view cryptocurrency, or how these perceptions change over time.”
—David Reibstein, Marketing Professor, The Wharton School
How Do Consumers View Crypto’s Uses
Age Demographics: Percent Owning Crypto
“A lot has been said about cryptocurrencies by a lot of people, but we must delve deeper to truly understand the implications crypto economics have for consumers, businesses, and politics.”
—Martin Paul Fritze, Marketing Professor, Ludwig Maximilians University of Munich
Key Takeaways
Crypto Payments and Regulations
Most consumers perceive cryptocurrencies as currencies, despite concerns that they are alternative currencies without government backing; they don’t view them as speculative investments. The authors found a link between those perceptions and crypto ownership status. Nearly 50% of crypto owners identified cryptocurrencies as long-term investments, while 42% of non-owners described cryptocurrencies as currencies.
Consumers also increasingly believe that cryptocurrencies are accepted in online and offline stores. For instance, between January 2023 and December 2024, participants who assumed online stores accept crypto increased from 16% to 25%. Those findings appear to be linked to consumers’ long-term desire for cryptocurrency regulation.
Crypto and Politics
The report found that political convictions influence consumer confidence and acceptance of cryptocurrencies, as the authors had outlined in a recent Knowledge at Wharton article. Specifically, they found that confidence in cryptocurrency increases in step with the rise of political conservatism.
That extends to the belief that the president influences cryptocurrency prices. Republicans, compared to Democrats, perceive Donald Trump’s election to positively impact crypto prices. At the same time, they expressed lower levels of trust in central institutions like the Securities and Exchange Commission or the Federal Reserve.
Future Research Directions
The future trajectory of crypto markets may increasingly hinge on consumer belief in cryptocurrencies’ ability to sustain a decentralized and secure system for asset storage and circulation. The authors are focused on three main areas in their continuing research. One is to validate the extent to which the c3i can accurately predict changes in cryptocurrency prices. Two, they are studying the determinants of trust within the cryptocurrency ecosystem. Three, they are investigating the factors that facilitate or hinder the adoption of cryptocurrencies as viable mediums of exchange and stores of value.