Key Takeaways

• 39.7% of crypto owners had previously forgotten their passwords, with 95.6% of them regaining access to their investments.

• 32.6% had previously fallen victim to a crypto scam, losing an average of $538.

• 11.9% of respondents believed their crypto wallet passwords were not safe.

• 1 out of 4 respondents used a password manager to remember their crypto passwords.

How Are Americans Keeping Their Cryptos Safe? [Survey]

If you're thinking of investing (or investing more) into cryptocurrency, there's probably one question on your mind: Can it be trusted? In other words, is it a good investment? Yahoo Finance suggests having 6% of your total portfolio in Bitcoin alone, while Bill Gates is actively against the idea. But what about everyday people who are actually doing the investing? Do they trust the concept? Are they having issues already? And what regrets do they have, if any?

We spoke to more than 1,000 owners of cryptocurrency to find out what's going on. They shared their preferred methods of trading, their trust in each wallet option, and some of the pitfalls they've fallen into. To discover what it's really like to be investing in cryptocurrency today, just read what they have to say.

Wallets and Trust

Our study began with a look into the most used cryptocurrency wallets and the faith the crypto audience at large has in each of those options. Moreover, we asked each investor how much they currently had invested in each available crypto wallet.

Unlike typical wallets, crypto wallets don't actually store your currency. Holdings live on the blockchain, and can only be accessed with your private key. If you lose that login, your cash is gone. This is one of the reasons why trust in the holder is so crucial for cryptocurrency's safety. For many, SoFi was the most trusted cryptocurrency wallet available today: 73% believed it to be secure. However, both SoFi and Robinhood are not traditional crypto wallets. Despite this, both of them were seen as crypto wallets by many respondents, which might imply that some crypto owners are not quite as knowledgeable about their investments and how they work.

Security didn't necessarily correlate with investment strategy, however. The most used cryptocurrency wallets were Coinbase (34.7%) and Robinhood (26.4%) followed by Binance (24.4%). SoFi didn't even break 10% of cryptocurrency users. Crypto holders also had thousands more dollars, on average, in their Coinbase and Binance accounts than they did in SoFi. Trust, while important, is clearly not the only qualification when it comes to this market.

Trust played a similarly interesting role in how users chose to work with their crypto. While users split roughly down the middle between desktop and mobile in terms of usage, they tended to trust their desktops to be much safer. According to cybersecurity experts, however, you're actually safer banking through the mobile apps on your phone than you are online with your desktop.

Crypto Keys

Password protection is absolutely key to the world of cryptocurrency. If you can't log in, you can't access your crypto. We next dived into the methods investors use to store their crypto passwords, how they create the passwords, and what happens when they can't log in.

It wasn't a given that people create safe crypto passwords: Only 61% believed themselves to have created a safe password. And fewer than half decided to make their passwords long and complicated. Perhaps the severity of forgetting a password is actually encouraging crypto users to choose something easy to remember and, therefore, less secure. That said, it's estimated that 83% of Americans use weak passwords for other logins, so the security employed for crypto is relatively much stronger.

Still, the worst did happen to many of our respondents: 39.7% had forgotten their passwords at some point. Fortunately, Bitcoin recovery services are now popping up that essentially use programming to try millions of passwords on your account. A whopping 95.6% of users who used these services were actually able to recover their money after forgetting a login. This success rate bears the potential to seriously alleviate some fears and trust issues among current and potential investors.

Crypto Scam Experiences

Like much of the digital world, cryptocurrency comes with its own set of potential scams. This piece of our study asked investors about the scams they'd personally fallen victim to and how it happened.

A third of surveyed crypto users had fallen victim to a scam before. Most often, they came in the form of an email (47.7%), a website (45.2%), or even a fake mobile app (44.6%). Emails often work in tandem with websites, asking a user to generate a login or give information that then enables the hacker to log into their crypto wallets. Those who made it to the website stage lost the most money of any scam type, losing an average of nearly $1,000 in the process.

Mining scams were much rarer, but still happened to more than 1 in 10 victims. Mining scams are also the oldest and most effective form of stealing bitcoins, where a company asks you to invest your bitcoins with them. For a time, the investments do well, then your money is given to their earlier investors.

Biggest Mistakes

Scammers and forgotten passwords aren't the only things that can go wrong with digital currencies. To help prevent further mistakes, we asked investors about the ones they had already made.

Panic-selling coins was the most common mistake investors made. Bitcoin prices do fluctuate heavily, which can often induce this type of behavior. Thirty-eight percent of investors panic-sold and regretted the decision.

Almost 1 in 4 crypto users released their coins before receiving payment, while nearly 1 in 5 made transactions through third-party platforms. Both of these mistakes can lead to a loss of investment and can also be used by fraudulent traders. While it is good to trust the people you interact with, it is better to remain cautious and ensure payment is received before releasing your crypto coins.

Another common mistake was to do the opposite, or excitedly buy too much of one type of coin. Diversifying is a key to investing in any arena, and cryptocurrency is no exception. Comparatively, permanent loss of passwords was only a mistake made by 12.5% of investors.

Moving Forward With Crypto

Digital investors demonstrated a high propensity to get involved with cryptocurrency even in the face of some major trust issues and bad experiences. Even after forgetting passwords or perhaps investing too much, their biggest regret was selling. Doing proper research and trying to take the emotion out of it will be key in any investor's future.

If you'd like to learn more about digital currencies, do not miss the wealth of information that is CryptoVantage. CryptoVantage can help you find the best wallets and exchanges for your needs and teach you the proper way to get set up. CryptoVantage's team of experts also consistently reports the latest research and projections on the market that are available today. To get started, head to CryptoVantage.com today.

Methodology

This study uses data from a survey of 1,021 crypto currency owners located in the U.S. Survey respondents were gathered through the Amazon Mechanical Turk survey platform where they were presented with a series of questions, including attention-check and disqualification questions. 63.2% of respondents identified as men, while 36.8% identified as women. Participants incorrectly answering any attention-check question had their answers disqualified. This study has a 3% margin of error on a 95% confidence interval. 7.4% of respondents identified as Gen Zers, 66.9% as millennials, 21.4% as Gen Xers, and 4.3% as baby boomers.

Please note that survey responses are self-reported and are subject to issues, such as exaggeration, recency bias, and telescoping.

Fair Use Statement

There is a lot of misinformation about cryptocurrency spreading. It's important to make sure studies are well-researched and verified like this. If you'd like to share this information, be sure your purposes are noncommercial and that you link back to this page.