How confident are crypto consumers?
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What is the Consumer Cryptocurrency Confidence Index?
Getting a bead on how people are feeling about crypto. From American Public Media, this is Marketplace Tech. I'm Stephanie Hughes.
Here at Marketplace, we often report on a monthly economic indicator from the University of Michigan called the Consumer Sentiment Index. It basically looks at how people are feeling about the economy. Now, a team of academics at the University of Pennsylvania's Wharton School have used that index as a model to create something similar, though much more niche. It measures how people are feeling about cryptocurrency. It's called the Consumer Cryptocurrency Confidence Index, which is a monthly survey now in its third year. I asked Wharton marketing professor Dave Rebstine, one of the creators of the index, what he hopes to accomplish with it.
Hopefully, what it is that I'm going to be able to do is start to predict what's going to happen with crypto prices and use it as a guide for people about should you be investing, should you not be investing, etc. And we could give some guidance about, you know, this appears to be a good currency to be investing in. And by the way, I refer to it as a currency. I don't actually think of crypto as a currency. And I don't think people do either. I think that they view it as a risky stock that one could be investing in, seems to be on the rise right now. Why not ride the coattails of this comment?
How much does the price of Bitcoin affect how consumers feel about cryptocurrency?
As the price goes up, people feel more confident. As they feel more confident, prices go up. For example, if you look at our index that we have, it actually peaked around April of last year. And it started to go down while the prices were still going up. And then we see subsequently the prices sort of steady and then the prices starting to come down. I fully anticipate we're going to see them take back off. But it's going to be some consumers that are starting to look at it and say, hmm, you know, the prices have come back down to earth a little bit. Maybe it's a good time to get back in. I think we're first going to see it with a rise in confidence and then the prices will fall.
What does your survey tell you about what types of people tend to be more confident in investing in cryptocurrency?
So it's really funny. I often ask my friends who haven't looked at the data, who do you think is more optimistic and actually more invested in cryptocurrency, East Coast, West Coast, or the Midwest? And inevitably, people say, well, it's got to be the West Coast because it's this tech, you know, newfangled thing. It must be the West Coast. followed by the East Coast, and then the Midwest would be the most conservative group. And actually, the data are quite the opposite. No, it's the Midwest, and in particular, the South, that happens to be most optimistic and confident in crypto. And I think the reason behind that is the decentralized desire. I don't want these major institutions that are controlling everything.
And if I can find a currency that I could be investing in that is not controlled by this central government, that's actually good.
We'll be right back.
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You're listening to Marketplace Tech. I'm Stephanie Hughes. We're back with Dave Rebstein, Professor of Marketing at the University of Pennsylvania's Wharton School of Business. Were there any other trends you saw in the data?
It turns out that, you know, we see some trends sort of in age groups and so forth. Not surprising.
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