Despite the risks that come with storing crypto assets with third parties, the findings of a new study suggest many cryptocurrency holders still trust exchanges with the safekeeping of their funds. Conducted by Binance Research, the study finds that 60% of “the general population store their cryptocurrencies on an exchange.” In contrast, 26% of the respondents use cold wallets and only 11% are using hot wallets.
Security of Funds Remain a Key User Concern
Dubbed the 2021 Global Crypto User Index, the study’s findings “are based on a global survey issued to over 61,000 crypto users across 178 countries and regions.” The study survey, which ran from September 15 to October 25, 2020, explored questions surrounding the respondents’ demographics. Researchers also sought to understand the crypto holders’ attitudes, preferences, adoption, and motivations towards cryptocurrency investment.
Meanwhile, the study findings show that despite the high percentage of the respondents who prefer storing funds with an exchange, security of the same assets remains a key. As the findings show, 28% of respondents prioritize an exchange’s “reputation of being secure” when choosing the best platform to buy cryptocurrencies.
The concern receiving the next highest consideration is the “intuitive user experience and user interface.” On the other hand, only 3% of the respondents prioritize an exchange’s reputation for being compliant with regulations.
Crypto as a Source of Income
In terms of the number of users that derive their income from cryptocurrencies, the study findings show that 51% of respondents said yes. From this figure, about 15% say cryptos are a primary source of their income while for the remaining 36% these constitute a secondary income. Still, the findings show that 48% of the respondents still consider crypto a hobby.
Meanwhile, the other key findings of the study include the popularity of decentralized finance (Defi) in South East Asia where 52% said they use Dapps. Overall, 66% of all Dapps users are using Defi applications.
The findings also suggest that a majority of users have less confidence in stablecoins with 78% saying they “would rather use bank coins instead of stablecoins.” Furthermore, findings suggest “adoption is primarily driven by the expected future utility for crypto assets.”
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