Sasson Capital analyzes users at different stages of crypto adoption, looks at how people enter crypto, and shares valuable insights for crypto builders, in a column for CoinMarketCap.
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Web3 should be built with the crypto-curious’ journey in mind. While crypto has entered the mainstream conversation, penetration is still low – 20M monthly active users on Ethereum, one of the most popular blockchains, compared to 5B internet users. Understanding how one goes from crypto to crypto convert isn’t just watercooler talk, but holds important implications for crypto founders and builders looking to win over the majority.
Last month, we wrote the first column for CoinMarketCap on the crypto landscape in Southeast Asia, detailing findings on adoption rates, overcoming barriers to mainstream adoption, and more. As conversation exposed Around the findings, another question arose – “What causes individuals to fall into the crypto rabbit hole?”
The journey, as we outlined in an earlier article, begins with The No-Coiner – someone who learns about crypto firsthand. As curiosity grows, perhaps enough to start a crypto wallet, everyone eventually faces a crossroads – “Should I buy crypto?” If yes, then the next question is – “Which crypto should I start with?”
Eager to know the answer and its implications for builders, we launched a second round of targeted surveys on 700+ individuals to understand 2 questions:
- Who encouraged them to buy cryptocurrencies in the first place?
- What was his first crypto purchase?
Here’s what we learned:
- More than half of respondents made their first crypto purchases for small-cap coins
- Stablecoins Are the Least Popular Route of Entry – But That Could Very Soon Change
- The media and news outlets remain king when it comes to building trust for the first crypto purchase.
- Family and friends also play an important role in getting someone on board crypto.
- While on-the-job advocacy for crypto remains low, the crypto-native generation is already learning about crypto from workplace interactions
What was your first crypto purchase?
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More than half of respondents made their first crypto purchases for small-cap coins
While the strict definition of altcoins is any crypto that is not bitcoin, we separated ethereum and stable coins from other altcoins to better understand consumer dynamics. From our survey, we learned that more than 1 in 2 individuals start their crypto journey with these small-cap cryptocurrencies. Through follow-up conversations with some of these individuals, we’ve learned that there are two types of purchasing motives – a speculative investment, and a means to an end.
On speculative investing, the assumption is that small-cap cryptocurrencies have larger volatility, therefore potentially higher than large-cap cryptocurrencies such as Bitcoin and Ethereum. Some people also colloquially refer to bitcoin as “crypto for boomers”.
Furthermore, small-cap cryptocurrencies were bought as a means to an end – whether it was purchasing non-fungible tokens (NFTs) or playing games.
“I bought AXS as my first cryptocurrency because I heard from some friends that they were playing Axie Infinity, and one of the requirements to play the game was to have some AXS tokens to pay for in-game activities like breeding. was” – college student
Stable Coins Are The Least Popular Route To Entry – But That Could Change Very Soon
Remarkably, stablecoins are the least popular route to entry. The most commonly heard reason was lack of utility. Rather than a medium for transactions related to products and services, stable coins are often used as a temporary store of value for active cryptocurrency traders. “When I think prices are about to drop, I use stablecoins like USDC as a safe harbor. Once they drop, I use USDC to buy back crypto, says one architect who is an active user of several decentralized finance (DeFi) protocols.
Yet this is a trend that could quickly reverse, as the use of stable coins for transactions is slowly increasing. Recently, the Monetary Authority of Singapore announced support for a purpose-built digital Singapore dollar, outlining use cases such as government payments and skill development claims. Powered by a trusted source with a top-down approach (i.e. citizens have to use digital SGD or else they won’t be able to claim benefits), it won’t be surprising to see stablecoins become the de facto entryway to crypto in the near future. Is. Future.
Who encouraged you to make your first crypto purchase?
After understanding what drove people to buy their first cryptocurrency, we were then curious what led them down the rabbit hole.
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The media and news outlets remain king when it comes to building trust for the first crypto purchase.
We learned that the media and news outlets still reigned king in building trust for someone’s first crypto purchase, with 27% of the population surveyed attributing their first crypto purchase. As a source of authority and credibility for a large segment of the population, the media and news publications play an important role in dispelling misinformation and providing a more objective voice in a noisy environment. Thus, reading, listening and viewing content from media publications becomes a major driver in influencing crypto interest and ultimately conversion. “I first bought bitcoin when I heard about it on the news. After a deeper dive, I understood more about what blockchain is and how a distributed ledger prevents corruption of financial records,” a secondary Says the school teacher.
Family and friends also play an important role in getting someone on board crypto.
While the media remains influential, family and friends play an important role in reinforcing the narrative and guiding a person into crypto. With 25% of survey respondents attributing their first crypto purchase to family influence and 21% to their friends, the importance of advocacy among existing crypto users is underscored. This is best illustrated by one pilot who shared, “I was skeptical for many years, even though I had friends around me who were buying crypto. I always thought it was just one big scam. However, in November 2021, I decided to reach out to a friend who conducts introductory classes to crypto. A year later, I am learning more and more about Web3, which helps me with the technology- As well as finance, both allow you to broaden your horizons.
This is echoed by another person who currently works as the data privacy lead, “I jumped into the crypto space in 2013 after hearing about it from a good friend at school. I was intrigued by the concept of mining for bitcoin and haven’t stopped since.”
While on-the-job advocacy for crypto remains low, the crypto-native generation is already learning about crypto from workplace interactions
Notably, workplace interactions are the least influential in the crypto conversion journey based on our survey. However, a dichotomy seems to emerge between the crypto-native generation (those born since 2000 and those who recently entered the workforce), compared to the crypto-immigrants (those born before 2000).
9% of crypto immigrants attribute their first crypto purchases to workplace interactions, compared to 17% of crypto natives. This could potentially indicate a growing interest in crypto among coworkers, or even discussion of crypto in the “work” fold as an increasing number of companies adopt Web3, crypto, and other distributed ledgers. Consider the implications of the techniques. A software engineer who falls into the crypto-native category said:
“I got into crypto when it was still viable for Ethereum over off-topic discussions in my software engineering team. My colleagues and I were assessing the feasibility of setting up a mining rig with off-the-shelf hardware and available software. wanted.”
Implications for builders – authority, social proof, scarcity
These findings hold important implications for crypto founders and builders looking to bring more non-crypto owners into the fold, and can be summarized in 3 principles:
1. Authorization – Ask any Web3 founder what they think about distribution and “social media” will likely be the no-brainer answer. Yet as our survey showed, while social media has a role (often in shaping public perception), the jump from “crypto curious” to “crypto convert” is often made at authoritative, credible sources such as the media and news outlets. depends. Founders should not neglect the importance of building authority and credibility for themselves and their companies, including in the media and news. Research has shown that establishing credibility and authority before attempting to influence increases efficacy – in a medical setting, patient compliance to seek advice from their doctors and therapists increased by 34% when professionals Posted his degrees, awards and certificates on the wall. ,
2. Social Proof There is a grain of truth in all clichés, including the “monkey see, monkey do” cliché. The role of family, relatives and friends in influencing individuals to buy crypto is undeniable – combined, they account for almost half of the population surveyed. Founders can think of ways to engineer “safety in numbers” – a concept that has been proven since the 1980s when researchers asked residents to make more donations after showing them lists of other residents in a neighborhood who had previously Had donated. The key is to find the right group of ‘influencers’ that the individual trusts and engages with.
3. Reduction – “Anything that is rare, unusual, or lacking in availability confers value on objects, or even relationships,” says Robert Cialdini, the father of modern persuasion research. While the concept is no stranger to the crypto scene (exclusive airdrops, low supply NFT collections and time-limited challenges), scarcity needs to be a combination of rare and valuable. While rarity can be engineered through a number of techniques, value first needs to be established, otherwise it will not be desirable. The pencil on my table may be the only one of its kind in the world, but if it is not valued and recognized, it remains priceless.
To conclude, interesting insights into the path consumers have taken to crypto adoption, their motivations and behavior (e.g. small cap crypto for speculation or as a means to an end), as well as the source of influence Is. Through an understanding of these, founders can thoughtfully establish authority, engineer social proof and create scarcity as they bring crypto to the majority.
This is a guest post by Coinmarketcap qin n louie, Principal at Sasson Capital, and has been edited for style. The original article was published here.
What is Sasson Capital
Season Capital (seasoncapital.com) is an early stage venture capital fund (pre-seed to Series B) with a focus on emerging markets. We support ambitious founders solving big problems in web3, fintech and embedded finance. Everyone on our team comes from an operational background, and we’re not afraid to roll up our sleeves to support our founders. We are backed by Credit Sasson, a Tokyo-listed $30B AUM consumer finance company with comprehensive financial services across Asia.
Where to find Sasson Capital:
website | Twitter , LinkedIn |
What is Coinmarketcap:
CoinMarketCap is the world’s most referenced price-tracking website for digital assets in the burgeoning cryptocurrency space. Its mission is to make crypto discoverable and efficient on a global scale by empowering retail users to draw their own informed conclusions with unbiased, high-quality and accurate information.
Where to find Coinmarketcap:
website | Twitter , Telegram | LinkedIn |
Source: www.bsc.news
