Newbie Investors, In 2022, new crypto investors in the United States were more likely to be influenced by their friends when making investment decisions, according to a survey conducted by the United States Financial Industry Regulatory Authority (FINRA) Investor Education Foundation.
The survey revealed that 31% of respondents cited “friend suggestion” as the primary reason for investing in cryptocurrencies for the first time, as opposed to just 8% for first-time equities or bond investors.
Moreover, the survey also found that the fear of missing out (FOMO) on a potentially profitable investment opportunity was another factor that drove new crypto investors to the market. Around 10% of respondents mentioned FOMO as a reason for their first-time crypto investments.
While new investors were influenced by their peers, they also valued the ability to start investing with small amounts. According to the survey, 24% of respondents said that they were attracted to the crypto market because they could start with small investments, a figure comparable to that of equities and bond investors.
Furthermore, the survey indicated that friends and family were the primary sources of information for crypto investors, with 48% of respondents citing friends, family, or work colleagues as their source of information about digital assets. Social media was the second-most-common source of information, at 25%, while only 35% of stock investors said they sourced information from their peers.
Interestingly, the survey found that younger, less educated investors were more likely to invest in cryptocurrencies than stocks. The average age of crypto investors surveyed was 37 years old, compared to 43 years old for stock investors. Additionally, only 28.5% of crypto investors had completed a four-year degree, compared to 46.3% of stock investors.
Despite their interest in crypto, the survey found that digital asset owners did not know as much about cryptocurrencies as they initially believed. Crypto investors scored 26.6% on a five-item quiz about cryptocurrencies, which included questions about issuance, taxation, and susceptibility to fraud.
The survey was conducted between September 9 and September 29, 2022, and involved 465 randomly selected participants from U.S. households. The margin of error was 6.75%.
The FINRA survey showed that friends and FOMO are major factors influencing new crypto investors in 2022. The social element of crypto investing is likely to be a contributing factor to this trend. Despite the enthusiasm for crypto, the survey also revealed that investors may not know as much about the digital asset market as they initially believed.