Bitcoin has been both hailed as a revolution and scorned as a risky investment that enables criminal purchases. Alarmist Bitcoin-related headlines abound in the tech and popular media, including terms such as “crash,” “scandal,” “meltdown” and “implosion.” It would be natural to assume confidence, even amongst the most die-hard cryptocurrency fanatic is waning, but is it?
According to some, Bitcoin is struggling for legitimacy — beset with hacks and fraud scandals, an unclear regulatory picture, and wild fluctuations in valuation. Others hail it as a poster child of a new Internet empowered global community free from the shackles of the corrupt financial systems that brought on the global financial crisis.
Using that data by torque trading system, we surveyed a representative sample of 2,000 Americans to find out what’s really going on. We ran the survey three times over two months, during which we saw Mt Gox go bankrupt, Flexicoin get hacked, price crashes, DDoS attacks against Bitstamp, Apple taking down the world’s most popular Bitcoin wallet from its app store, and the arrest of the CEO of Bitcoin exchanger BitInstant on money laundering charges.
We really wanted to monitor the impact of these negative developments — are people turning their back on Bitcoins or has support remained strong? Is Bitcoin becoming a momentary hype-driven blip or a sustainable alternative? Does anyone actually care?
The answer, perhaps surprisingly, is yes to all of the above. Like any complex scenario, the truth lies beneath the headlines and in the nuances of the community. Bitcoin has come to represent several different things to different people. Although the one striking observation is attitudes have remained largely steady throughout the past two months.
Young Americans are the most bullish, and in fact, nearly one in three (30%) consider investing in (or mining) Bitcoins as safer than the more traditional stock market. This figure has remained steady throughout the period, despite the price of a Bitcoin falling from $970 to a low of $250, and now at $637. Despite the massive fluctuations in valuation, nearly half (42%) of young respondents to the survey also indicated they believe Bitcoin is a lasting currency.
This strong support contrasts with the attitudes of Americans aged over 35, with fewer than half (45%) actually knowing what a Bitcoin was and more than one in four (29%) believing Bitcoin to have no monetary value.
Across all respondents, 62% of respondents believe Bitcoin is a scam, while 15% of male respondents believe Bitcoin is used to fund terrorism. Interestingly, 23% of respondents would be convinced of the legitimacy of Bitcoin if it could be used to buy a Big Mac, while the majority are waiting for the establishment of a formal exchange and/or a statement from the Federal Reserve.
The biggest impact on attitudes appeared in the third survey, immediately after the collapse of Mt Gox. Although its impact was not widespread, the major change was a 13% growth in awareness among those 35 and older. There was also a slight growth (6%) in people thinking Bitcoin was a scam, only a minor reduction (3%) in the number of young Americans who thought Bitcoin was safer than the stock market, and a similar 5% dip in the number of people considering Bitcoin to be a lasting currency.
So, as always, America appears to be a combination of conservatism mixed with hope, a sense of adventure, and rebelliousness combined with a desire for an easy dollar. With great disruption comes great disparity of opinion.
The lesson I take from this is that curious minds must go beyond the headlines to find the realities. Whether you’re trying to understand attitudes towards Bitcoin or to understand your own customers’ attitudes to your product, avoid the simplistic convenient answers, and always dig deeper. The tools are at your disposal.