US and GB: Was there enough trust in the crypto space even before FTX went south?
November 18th, 2022, Lesley Simeon

US and GB: Was there enough trust in the crypto space even before FTX went south?

On 9 November 2022, cryptocurrency exchange Binance announced a nonbinding offer to acquire rival digital currency company FTX - an acquisition that would’ve consolidated the crypto market signifcantly given they were, by some measures at least, the largest and second largest platforms in the sector. A little over 24 hours and a corporate review later, the deal no longer stands. In a series of tweets explaining its decision, Binance wrote that while the company hoped to support FTX’s customers to provide liquidity, “the issues are beyond (their) control or ability to help.”

Regardless of the rescue deal’s failure, the implosion of FTX is unlikely to help assuage one of consumers’ biggest fears about crypto – that it is not to be trusted.

According to YouGov Profiles - which covers demographic, psychographic, attitudinal and behavioral consumer metrics – 55% of Americans and 59% of Britons share a lack of trust in digital currency.

Not just that, being unable to fully understand what the world of cryptocurrency is about seems to drive people’s opinion of the space. Profiles data shows that a majority of both Americans (68%) and Britons (74%) agree that they do not really understand cryptocurrency.

Less than 48 hours after it first announced plans to bail out its competitor by providing its customers with liquidity, Binance backed out citing “mishandled customer funds” and potential agency investigations. Since then, FTX’s website went offline once, with a message alerting users that the exchange would not be able to process withdrawals. Mercedes has also terminated its partnership with FTX, and the exchange has even frozen millions worth of crypto company capital.

Binance on the other hand is preparing to launch an industry recovery fund to help other crypto companies impacted by the FTX saga.

For a market that’s largely unregulated, it’ll take serious effort and intent for crypto exchanges, no matter their size, to regain and continually secure the trust and confidence of the consumers and potential partner brands alike.

According to YouGov data, as of now, 7% of Americans and only 0.4% of Britons would opt for digital collectibles like cryptocurrencies as investments in the next 12 months. Whether these respondents do invest as they’ve indicated could well be influenced by how the FTX saga and the industry’s reaction to it plays out.

Had the FTX-Binance deal gone through, the crypto industry would have seen two of its largest exchanges come together. But the data brings to light more fundamental concerns surrounding cryptocurrency that the industry might need to solve first.

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Methodology: YouGov Profiles is based on continuously collected data and rolling surveys, rather than from a single limited questionnaire. Profiles data for the US and UK is nationally representative and weighted by age, gender, education, region, and race. Learn more about Profiles.

Photo by Traxer on Unsplash