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Cryptocurrency is still a financial platform that is not totally understood by a segment of the population. To that
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end, the Wharton School has developed a cryptocurrency confidence index so we can better understand the perception of
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that marketplace. Pleasure to be joined by Dave Reestein, marketing professor here at the Wharton School, who is one
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of the collaborators on this report. Dave, it's been a while. How are you, sir?
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>> I'm doing great and thank you very much for having me on today. >> Thank you. Let's start, I guess, by
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giving us the background on doing a report like this. And obviously, with something like cryptocurrency that is
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still relatively new for a lot of people, having a better understanding of what people's understanding is is
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probably a good thing. >> I think the way you say stated it is exactly right. We're trying to
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understand what people think and and their perceptions of of the currency. And so, it's a new financial instrument.
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And the question is so how confident are people about that? That's what we were
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trying to do. >> All right. So tell us more about the report how the data is collected the
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question the types of questions that are asked. >> So we have a variety of questions but
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let's first start as you say with how the data is collected. We're using an
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online panel. We do a sample once a month and we sample 1,000 people from across the United States. So, it's US
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only and and only, you know, looking at 1,000 people, but we've been doing it
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now for 36 months. Actually, this is we just did our 38th month because we started January 2023
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and um and we have a variety of questions. the key set of questions that we have asking people about how
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confident they are in the currency. And so we do that asking four different questions and we want to know
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specifically sort of what it is they think about the future of cryptocurrency. And we're trying to see
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does consumer sentiment does their confidence in it in any way help us predict what's going to happen with
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crypto prices. So right now what is the report telling us about people's thoughts on cryptocurrency?
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>> Well, what I will tell you is for the first several years, you know, crypto
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prices and confidence kept going up and it was sort of hard to separate. Is is confidence lagging prices that as prices
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go up, people become more confident or as they become more confident, do prices then go up? And the and the answer was
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it's some of both. But what we started seeing is while the prices were going
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up, we saw confidence starting to go down. And it was like suddenly these these two lines that were in parallel
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started to separate. And it was like, hm, what's this going to tell us? And as
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we saw confidence go down, two months later, prices started to go down. And so the confidence we're precursors to the
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prices and what it is that we saw. >> Do we know why the confidence has kind
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of led us on this path right now? >> We don't know why. What what we do know
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is we ask people what is it that influences them a and um and use that to try and see so what could be leading
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actually their confidence and um but we don't have you know so tell us why you're less confident we we don't have
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that we have a whole bunch of other questions about you know so who are you where do you live right
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>> how how confident are you in in the Fed and the SEC we have questions like that
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that are part of >> well and and so that is another important part to this because the
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regulatory side is something that is still very much up in the air but it is a very important component to where I
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think most people think cryptocurrency is going to have an impact the next 5 10 20 years down the road
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>> no no question about it it's it's going to be part of what happens
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>> and and and and I might say that I think that owners of crypto are becoming more appreciative of um of
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regulatory playing some role and and assuring that it's going to be stable. >> How much do you see a lack of
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understanding still about the platform out there and if it's out there obviously what kind of impact does that
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have? uh there's no question there is a a great deal of uncertainty, lack of
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understanding as you put it and and yet I think what that means is that people view this as a risky investment
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but they but they do view it actually to me what's really interesting is we refer
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to it as cryptocurrency. >> Yeah. like it's it's an alternative currency, but to a very large degree,
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it's viewed like an investment and and people do see it as a risky one because
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there's so much uncertainty about what's really behind it and and where it's
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going to go, >> right? And and I think that's a key component there. And so then from that
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perspective, do people feel like it is something good to potentially invest in right now?
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So they were feeling more and more positive about it. Um when President Trump came out supporting it, we do have
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evidence that you know Trump's support bolstered confidence, >> bolstered prices, but now what we see is
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some people I don't know I can't say they're losing confidence in the
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president because they still say he plays a role in in it. But um but obviously some of their confidence has
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gone down with the currency. >> Yeah. and and it probably can't help that we get these anecdotal stories uh
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of cryptocurrency being used somehow in illegal activities and and obviously when you're thinking about the marketing
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of a product I know there's the old line about you know any press is good press but in a
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certain like this I think negative press certainly can't help the growth of something like cryptocurrency
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>> that is absolutely the case It it makes it seem a little bit dirty when it's
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being used in any criminal activities. >> Yeah. >> And and those have ranged in in all
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sorts of different types of activities. And I and I think that has led to some of the volatility that we see.
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>> I was going to ask you next, can you see the level of confidence adjusting as we
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have seen some of the price volatility in cryptocurrency over the last uh last year, year and a half? So it to to my
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amazement the confidence grew over the last year and a half and it's only been
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in the last few months that we've seen the confidence starting to go down >> and and then subsequently we see the
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prices going down. >> What then are you watchful for from a researcher's perspective as you move
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forward with this type of work talking with people every month? So, we're we're
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trying to see shifts in who it is that is owning cryptocurrency and who it is that is confident about cryptocurrency.
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Yeah. One of the things that is amazing to me is, you know, I I ask people, so who who do you think is most likely to
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be confident in cryptocurrency, East Coast, West Coast, or the Midwest? And people always guess the coast, and it's
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the Midwest that happens to be the confident. And that really surprises people. Uh and and then the question is
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so why? And and we've tried digging from a researcher's perspective about why
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that would be the case. >> And some of some of that is just in terms of confidence and centralized, you
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know, uh control. And so thinking about the banking system and then their centralized control, a a lot of the
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Midwest and a lot of uh the more conservative sector of the population tends to want things decentralized
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and um and and we see that in the data >> and I assume that that the mindset of
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the public at least right now is they do see it as an investment. They do see it
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as a component to move value back and forth, but they probably don't see it as
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a traditional currency as we know it, like a dollar, $20, etc. Um, and it doesn't feel like we're going to get to
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that point, you know, anytime in the near future. >> So, one of the questions that we've
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asked people in past is, would you like to be paid in cryptocurrency? And and the answer is no, no, no. Even
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those that are confident say, "No, don't give me hard cash." You know, I want I
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want cash. I have much more confidence in cash. Um, I'll selectively take money
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I could afford to gamble with and and put it into crypto, but don't put my paycheck in crypto. That's too much.
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>> Dave, I appreciate the time today. Thanks very much. All the best. >> Okay. Well, thank you very much. And
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enjoy the snow. >> Thank you. Dave Reestein, professor of marketing here at the Wharton School.