Bunker Bay, June 10: New research by global consumer insights company Protocol Theory has uncovered a growing interest in crypto as Kiwis seek alternatives to home ownership to build financial freedom.
In partnership with the country’s largest cryptocurrency exchange, Easy Crypto, the research aimed to profile the next wave of crypto adopters.
The findings show that New Zealanders are in the ‘early adopter’ category for crypto, though blockchain and Web3 innovators have some work to do in terms of education and earning user trust.
Nearly 50 per cent of New Zealanders own, have owned, or are considering future investment in crypto.
One in three investors likes crypto because it reduces profits for banks and companies.
Many believe that governments and banks are the main obstacles to achieving financial freedom.
Only 16 per cent of respondents said they could invest a small amount in real estate over time, compared to almost 60 per cent who believe they could do the same in crypto.
“For many Kiwis, the dream of home ownership is at odds with their current economic reality. At the same time, crypto is entering the mainstream – including institutional investment – and our mission is to leave no one behind. The main goal of our research was to understand the next wave of crypto adopters and what we need to do to support them to make informed and smarter investment decisions,” explains Janine Grainger, Co-Founder and CEO of Easy Crypto.
“With the quarter-acre dream becoming progressively challenging for younger folk – unless they have intergenerational wealth – and Gen Xers and Boomers looking to supercharge their retirement in an increasingly challenging economic environment, crypto has undeniable cross-generational appeal.”
Just 16 per cent of respondents said they could invest a small amount in real estate over time, compared to almost 60 per cent who believe they could do the same in crypto.
Moreover, there was a rising willingness to consider alternative assets, with only 20 per cent of those surveyed believing that the only safe investments are those insured by the government, signaling increased consideration of alternative assets to grow their wealth.
Interestingly, 26 per cent of Kiwis agree that crypto enables greater equality for all – compared to just 23 per cent for property investments.
The survey results revealed some of the highest adoption figures yet, with 14 per cent of the over 1000 respondents from the general adult population reporting that they either own or have owned crypto (compared to 10 per cent reported by the FMA in 2022).
“These rates rise to 45 per cent – almost half of Kiwis – when we also factor in those ‘considering future investment’. What’s more, once people have adopted the asset class, very few abandon it,” Grainger said.
And while it’s no surprise that 72 per cent of investors believe real estate delivers high returns, around 40 per cent of investors also agree that crypto delivers high returns.
This places New Zealand in the ‘early adopter’ category of the crypto adoption continuum, indicating that Kiwis quickly see its potential and are eager to jump in and test it out.
Although digital currency addresses many challenges inherent in traditional finance, such as high transaction fees, centralised control, slow cross-border transfers, and limited accessibility, there are significant issues that make it difficult for first-time users to invest in or use crypto.
“Crypto offers a low capital, low-cost investment, but there are significant gaps between investment ‘intent’ and ‘action’, i.e., between wanting to invest and actually investing,” explains Grainger.
Seventy-two per cent of those who haven’t invested yet find the process confusing and admit they “do not know where to start.” Their concerns include that information is difficult to understand (67 per cent) and that they don’t know who to ask for help (67 per cent).
Among investors, barriers to entry were the same as those faced by the general population.
Alongside the need for clarity, 50 per cent of respondents supported the need for regulation governing ‘how’ crypto providers conduct themselves (i.e., ethical, trustworthy operations) to enable wholesale participation.
“While the consensus around confusion is disappointing, the findings are a clear call for the crypto industry to do a lot better when it comes to engaging with both existing and future investors,” says Grainger, who believes that the trifecta that will drive adoption is investor motivation, opportunity, and having a voice of trust.
“There is clear intent to invest, and uptake is growing. What’s more, investors are disillusioned with current solutions and looking for alternatives. For them to close the value-action gap between identifying crypto as a way to create a better future for themselves – and acting on this belief – we need to ensure a much easier ‘onramp’,” believes Grainger.
Now is the time for products that address the biggest barriers to crypto adoption – volatility and complexity. These include stablecoins that offer Kiwis a stable entry into the digital marketplace, marrying the trustworthiness of underlying traditional assets with all the benefits of blockchain, and user-friendly wallets that are suited to ‘beginners’.
In addition, it’s time to prioritise ‘crypto for humans,’ focusing our efforts on a user-centred approach that simplifies all aspects of the crypto experience to accelerate adoption.
Crypto projects and platforms need to prioritise communication in simple-to-understand, plain language and exchanges need to offer information and tools to help users make better decisions around crypto.
Moreover, the promise of transcending disproportionate banking profit and government policies isn’t enough. Investors want the industry to ‘level up’ in terms of providing a safe, secure investment environment.
“Exchanges should provide enhanced security that includes blockchain analytics and refuse to take a user’s money when they suspect users are being taken advantage of or scammed. Crypto exchanges that take custody of investor funds are simply replacing centralized control with another form of centralized control. At the heart of the non-custodial exchange model, in which users purchase crypto to be sent to their own wallet, lies a revolutionary approach that emphasises user autonomy and security, where each user becomes their own ‘bank’ and manages their own crypto,” explains Grainger.
Grainger is a member of the Digital Trust Working Group formed in 2023 to advise APEC and was invited to join the V20 virtual asset summit as part of the 2022 G20.
Additionally, Easy Crypto’s website is packed with information and tools to help users make better decisions around crypto.
With enhanced security that includes blockchain analytics, the exchange regularly refuses to take a user’s money when it suspects users are being taken advantage of or scammed.
To usher in a new era of DeFi, our focus must move beyond talking about crypto’s potential.
The next generation of investors is already convinced and is researching their options.
The pathway to mass adoption hinges on a user-centric approach that demystifies the crypto experience, prioritises straightforward, jargon-free communication, and equips users with the necessary tools and resources to make informed decisions.
The industry must also elevate its security standards to provide a safe and trustworthy environment for investors, including robust security measures that ensure users are protected and their investments are secure.
“Only by addressing these critical areas can the industry achieve the ‘trifecta’ needed for action,” concludes Grainger.
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