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75% of Americans Don't Trust Crypto—and Nearly Half of Traders Say Their Investments Have Performed Worse Than Expected

Kadir Bolukcu | E+ | Getty Images

Americans don't have a lot of faith in cryptocurrency. Around 75% of those who are familiar with crypto say they aren't confident that the current ways to invest in, trade or use cryptocurrency are reliable and safe, according to Pew Research Center's April survey of 10,071 people ages 18 and older living in the U.S.

About 18% say they're somewhat confident, but just 6% feel extremely or very confident, the survey found.

Confidence varies by age as well. About 66% of U.S. adults under 50 who are familiar with crypto aren't confident in its reliability and safety, the survey found. For those over 50, that number rises to 85%.

What's more, American crypto traders feel their investments haven't performed as well as they had hoped, according to Pew's survey.

About 45% of respondents say their investments have actually done worse than they expected. While 30% say their investments have performed as expected, only 15% say their investments have performed better than anticipated.

The state of crypto

One reason for the lack of optimism could be that it's currently a somewhat complicated time for the crypto industry.

The overall cryptocurrency market lost around $1.4 trillion in value in 2022 as various crypto firms filed for bankruptcy and FTX, one of the largest crypto exchanges, collapsed.

Additionally, crypto investors lost nearly $4 billion to hackers in 2022, according to Chainalysis, a blockchain analysis firm.

But despite previous turmoil, crypto's most popular digital coin appears to be rallying so far this year.

Since the start of the year, bitcoin has surged by about 80%. As of April 13, the price contiues to hover around $30,000. This stretch is the first time it has reached that level since June 2022, but it still remains significantly lower than the more than $68,000 peak bitcoin reached in November 2021.

Why consumer confidence matters

But when it comes to crypto, consumer confidence is especially key.

Since virtual currencies typically don't derive their value from an underlying asset, they're only worth as much as investors are willing to pay for them.

"Because it has no fundamental backing, crypto is a sentiment-driven trade," James Royal, principal reporter at Bankrate, tells CNBC Make It. "It's absolutely vital for crypto promoters to keep drawing more people into it however they can."

This is also why crypto is considered to be a highly volatile asset — its price can erratically fluctuate or decrease in value. Because of this, financial advisers tend to advise against investing more than you're willing to lose.

"Crypto is not an investment," says Royal. "But rather a trade to make money from the next guy coming in the door."

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