Users’ attitudes towards cryptocurrencies in their rapidly changing era
Introduction
With the recent market downturn in 2022, the value of cryptocurrencies dropped significantly, and the cryptocurrency industry now faces a liquidity crisis. Despite the fall, the crypto market is expected to grow at a CAGR of 12.2% over the next six years, reaching revenues of around US $2.8 billion by 2028. Cryptocurrencies and blockchain technology are being used in a variety of industries, from finance and investment to supply chain management and the arts. In recent years, the technology has gained widespread attention for its potential to revolutionize traditional business models and disrupt traditional industries.
The value of cryptocurrencies is determined by supply and demand in the market, as well as the perceived utility and adoption of the technology. But unlike traditional currencies, which are backed by physical assets like gold or government fiat, the value of cryptocurrencies is not tied to any specific asset and is instead based on the trust and confidence of users.
Although these are not the best times for the cryptocurrency industry, it has been in the spotlight throughout the year, so it is not surprising malicious actors want to profit from these trends. Scammers are constantly coming up with new ways to defraud cryptocurrency users, from impersonating legitimate exchanges and wallet providers to using phishing attacks to steal login credentials and access funds. Additionally, in Q3 2022, the number of new variants of miners increased by more than 300 percent over the same period in 2021, with more than 150,000 modifications reported.
This study commissioned by Kaspersky aims to examine the psychological, technical, and social aspects of cryptocurrencies and to understand the attitudes of people around the world towards this type of currency. By exploring both positive and negative attitudes, we aim to gain a deeper understanding of the consumer cryptocurrency market.
Methodology
Kaspersky commissioned Arlington Research to undertake quantitative global online research with 12,000 people from 16 countries including Austria, Brazil, Colombia, France, Germany, India, Malaysia, Mexico, Saudi Arabia, South Africa, Spain, Switzerland, Turkey, UAE, the UK, and the USA.
The sample group included a diverse range of users who had some familiarity with cryptocurrency. These users can be classified into five categories:
- Regular users — These are individuals who currently own cryptocurrency and use it frequently to make purchases or donations.
- Wait and see owners — These are individuals who own cryptocurrency mainly as a form of experimentation or investment.
- Passive owners — These are individuals who own cryptocurrency but do not actively use it.
- Ex-owners — These are individuals who used to own cryptocurrency but no longer do.
- Non-owners — These are individuals who have never owned cryptocurrency but have a basic awareness of cryptocurrency.
Key findings
More users started to understand how crypto works
In the last four years, crypto awareness has grown compared to 2019 when 45 percent said that they had only heard of cryptocurrency but did not know how it works (7%). Nearly a third of consumers (31%) now claim to have a good or even a full understanding of how cryptocurrency works.
Far East leads crypto awareness
People living in the APAC region, an area of the world with the most e-Mobile and digital commerce, is where 51 percent claim to have a better understanding of cryptocurrency when compared to other regions.
This is backed by personal crypto usage highlighted by strong regional variation where 73 percent of participants from APAC have direct ownership experience of cryptocurrency, followed by South Africa (57%), the Americas (47%), and Europe (36%).
Currency volatility is a key barrier to usage
Almost half (48%) of the respondents are afraid to lose money because cryptocurrency is too volatile, and one in 10 users have already lost money due to a drop in currency value and stopped using crypto.
There is low awareness of crypto threats
Only a quarter (25%) of those surveyed feel well-informed about the threats faced by cryptocurrency owners. Almost the same amount of users (23%) have no information at all. In general, awareness decreases with age and is higher among younger consumers, under 35.
Cyberattacks causing money loss are a bigger concern for users
Virtual theft and scams are common concerns among cryptocurrency users (27% and 26%), prioritized over other threats like cryptojacking (5%).
Cyber threat perception varies by region
In South Africa and APAC countries, crypto-investment fraud (23% and 15%, respectively) and fake apps (16% and 15%, respectively) are major concerns. In Europe, blackmail and extortion (13%) are key concerns.
Users believe cryptocurrency needs more protection
Nearly half of all respondents (49%) do not believe that the current protection systems for cryptocurrency are effective, and a significant portion (31%) believe that these systems offer very little or no protection against threats.
Crypto needs more regulation
When it comes to market management, 54 percent would like to see regulation by an independent authority, while 44 percent agree cryptocurrency regulation should be carried out by banks. The idea of enforceable laws against cryptocurrency-related cybercrime is met with the greatest approval, with 72 percent expressing support.
Crypto trust issues — what is users’ attitude towards crypto in 2023?
According to our research, crypto users are primarily motivated by investment opportunities (37%), the convenience of fast and easy transfers (33%), and the privacy and anonymity offered by cryptocurrency (27%). However, nearly a quarter of consumers feel uncertain about the potential benefits of crypto.
The survey also found that geography and culture can significantly influence attitudes toward cryptocurrency. For example, a higher percentage of respondents in Europe (35%) selected fewer positive options than globally (24%).
Overall, the majority of respondents indicated that investing is the main reason for holding cryptocurrency, with 16 percent holding crypto for unclear or experimental purposes.
What do people use crypto for?
Holding a range of cryptocurrencies in a portfolio remains the main motivation for buying it (33%), with making as much profit as possible being the biggest motivator behind ownership. Paying for purchases online is catching up fast (29%), even if this is not a regular occurrence yet. Globally, the number of physical brick-and-mortar stores accepting cryptocurrency is still limited.
Q.: What, if anything, have you used your cryptocurrency for?
Rapid money transfers within their own country via crypto are becoming more common than sending money abroad, with owners in APAC standing out as the most active users doing this. Charity (15%) or donation to a political cause (14%) are fairly common answers but are registered as a minority at the same time. This might be due to the methodology limitation — donating to prohibited organizations via crypto is one way to support them in many autocratic regimes, which are out of the research scope.
Meteoric Bitcoin rise caused the rise of crypto usage
According to the survey, nearly half (49%) of all crypto purchases have been made in the past two years (since 2020). Additionally, European crypto owners are more likely to have started buying cryptocurrency between 2012 and 2015, which is similar to the adoption rate of their APAC counterparts. These findings align with the rapid increase in the adoption of cryptocurrency, particularly Bitcoin, which saw a 200 percent surge in 2020.
Q.: When did you purchase cryptocurrency for the first time?
Cryptocurrency expectations: half okay, a third happy
Just over half of respondents (53%) reported feeling ‘fairly happy’ or okay with their cryptocurrency holdings. Those who had a good to excellent understanding of how cryptocurrency works were more likely to have their expectations exceeded — 76 percent reported having at least a good understanding. Cryptocurrency owners in the APAC region were particularly likely to see their expectations exceeded (21%), as were those who felt very well informed about the potential threats to their cryptocurrency (28%).
This may be because they took appropriate measures to protect against potential loss and disappointment. On the other hand, 29 percent of respondents said that their expectations were only met to some extent, while 9 percent regret buying cryptocurrency at all. Those surveyed in Europe (11%) regret investing in cryptocurrencies more often than users from other regions.
What makes users stop using crypto?
Currency volatility remains to be a key barrier to usage. Almost half (48%) of all respondents are afraid to lose their money because cryptocurrency is too volatile — one-in-10 surveyed had already experienced a loss of money due to a drop in currency value. Interestingly, this concern was particularly strong among non-cryptocurrency owners, with 61 percent expressing this concern yet having never owned cryptocurrency. Losing personal data during a cyberattack was the third most cited reason for stopping the use of cryptocurrency, with six percent of respondents having already lost cryptocurrency due to fraud or scamming. These findings suggest that stability and security are key barriers to the wider adoption of cryptocurrency.
Main reasons to stop using cryptocurrency stated by the respondents
A profitable target for cybercriminals — are crypto users informed about the possible threats?
Only a quarter (25%) of respondents feel extremely or very well informed about the threats faced by cryptocurrency owners, while 23 percent have no information at all. In general, awareness decreases with age and is higher among younger consumers under 35. This is a concerning trend since cybercriminal activity in the cryptocurrency industry does not seem to slow down.
Users that are very/extremely well informed about potential threats, by age
Cyber threats, such as virtual theft and scams, are among the most commonly cited negative aspects of using cryptocurrency (27% and 26%). In fact, respondents seem to prioritize these threats over others, such as having their computer’s processing power hijacked through cryptojacking (5%). This may be because they perceive phishing attacks as a more immediate and direct threat to their cryptocurrency wallets. However, it is important to note that anyone can be a target of cryptojacking, whether they own cryptocurrency or not. In fact, 38 percent of respondents did not know or realize that they could become a target of crypto threats even if they do not own cryptocurrency. This highlights the need for all users to be aware of the potential risks and take appropriate measures to protect themselves.
In real life, this might not be particularly true. Our research shows that cybercriminals tend to retrain to cryptojackers since it is profitable for cybercriminals as they don’t pay for equipment, or electricity, which is more expensive in 2023. They install mining software on the victim’s computer to use its processing power without the user’s consent. It does not require much specialist technical expertise. If the cryptomining malware is installed successfully on the victim’s computer, it provides its operator with steady earnings.
The type of threat that is of most concern varies by region. For example, in South Africa and APAC countries, crypto-investment fraud (23% and 15%, respectively) and fake apps (16% and 15%, respectively) are major concerns. Cryptocurrency users in Europe are particularly concerned about extortion attacks in which scammers threaten to reveal their browsing history on adult websites unless they provide private keys or send cryptocurrency (13%). Despite these differences, there is a basic global awareness of the existence of cryptocurrency threats, with 82 percent being aware of at least one potential cyber threat. Awareness is highest in APAC and South Africa and is driven by higher levels of understanding and active usage of cryptocurrency.
Half of all respondents have been affected by cryptocurrency crime in some way, but no single threat stands out as dominant, highlighting the wide variety of criminal activities in the field of cryptocurrency.
Q.: Which threats, if any, have affected you, personally?
We also asked individuals about their concerns regarding the security of cryptocurrency. Thirty-one percent of respondents expressed strong concerns about this topic, while 37 percent reported having little or no concern. The results of the survey varied by region, with consumers in South Africa and the APAC region showing the highest levels of concern (22% and 20% were extremely concerned, respectively), while Europeans were less concerned, with 12% expressing strong concern.
It is not surprising that individuals who have personally experienced threats related to cryptocurrency have higher levels of concern about its security. In fact, 20 percent of these individuals are extremely concerned about this issue.
Nearly half of all surveyed (49%) do not believe current protection systems for cryptocurrency are effective, and a significant portion (31%) believe that these systems offer very little or no protection against threats.
The future of Crypto: is the new form of currency to stay with us?
According to our 2019 report, while nearly one-third of survey participants think it will become as important as traditional currencies, only a small number believe it will eventually replace them. This belief has decreased significantly since the survey, with only 16 percent of interviewees currently viewing crypto as a passing trend. Older age groups are particularly likely to hold this view, with 27 percent of those 65 and older seeing crypto as a passing trend. On the other hand, those who are actively using or investing in cryptocurrency are more likely to believe in its future importance and have a greater understanding of how it works.
When asked about the potential use of cryptocurrency in the future, most respondents were not positive about the possibility of using it for everyday purchases, especially in European countries (25%) where attitudes towards its acceptance in daily life were the most negative. However, consumers do appreciate the benefits of privacy and freedom from regulation, with nearly half viewing them in a positive light. In particular, consumers in South Africa (30%) and APAC (29%) were most positive about the anonymity of making donations using crypto, compared to the global average of 24%.
Does crypto need more regulation in the future?
Considering the role of governments in regulating cryptocurrency, the majority of people (54%) agree that there is a strong desire for more regulation of cryptocurrency. However, there is less enthusiasm for this regulation to be carried out by banks, with only 44 percent agreeing and 27 percent disagreeing. The idea of enforceable laws against cryptocurrency-related cybercrime is met with the greatest approval, with 72 percent expressing support.
Q.: Thinking about the role of governments in regulating cryptocurrency, how strongly do you agree or disagree with the following statements?
Conclusion
Cryptocurrency has gained a large and dedicated following in a relatively short period of time, and attitudes towards it have become more positive as its value has fluctuated. In 2022, a significant number of consumers (nearly a third) report that they understand what cryptocurrency is and how it works, indicating a significant increase from previous surveys.
While some people use cryptocurrency for investment or experimentation, the main barrier to adoption is a lack of knowledge, with 20 percent saying it is complex and 16 percent calling it mysterious. Interviewees also associate cryptocurrency with risk and volatility (22%) and are concerned about losing money when buying (26%). In addition, 42 percent say its fast-changing value is a negative factor.
In regions where electronic mobile and e-commerce transactions are prevalent, such as the Asia-Pacific region, using cryptocurrency to pay for purchases is becoming more common. While there is a basic global awareness of cryptocurrency threats, 49 percent say existing security systems need additional protection to make cryptocurrency as important as traditional currencies or financial markets in the future.
Demographically, younger respondents are more likely to have more knowledge about or experience with cryptocurrency, while older age groups in countries such as Austria, Germany, and Switzerland tend to prefer cash transactions over credit cards or other electronic payment methods, so it may take longer for them to adopt cryptocurrency. Despite this, respondents from European countries are most excited about the potential for using cryptocurrency in their everyday activities, such as shopping.
Overall, it appears that cryptocurrency is here to stay, but in order to fully capitalize on the opportunities it offers, consumers are calling for some form of regulation to control and stabilize it as a long-term currency, ideally by an independent institution. There is a clear need to improve security solutions to protect cryptocurrency, regardless of whether someone is interested in it as an investment or is a crypto trader or user.
A comprehensive protection against a variety of threats cryptocurrency users might face, including cryptoscams and fraud, cryptojacking, or identity theft, is offered by Kaspersky Premium. Learn more here.
About Kaspersky
Kaspersky is a global cybersecurity and digital privacy company founded in 1997. Kaspersky’s deep threat intelligence and security expertise is constantly transforming into innovative security solutions and services to protect businesses, critical infrastructure, governments and consumers around the globe. The company’s comprehensive security portfolio includes leading endpoint protection and a number of specialized security solutions and services to fight sophisticated and evolving digital threats. Over 400 million users are protected by Kaspersky technologies and we help 240,000 corporate clients protect what matters most to them. Learn more at www.kaspersky.com.