Reading 2 minutes Views 1 Published Updated
According to a survey conducted by the US financial regulator, the influence of friends and fear of missing out (FOMO) were among the reasons why investors first bought cryptocurrency in 2022.
A survey released by the U.S. Financial Industry Regulatory Authority (FINRA) at the end of April found that a large proportion (31%) of new crypto investors cited “friend offer” as the main reason for their foray into crypto.
This is compared to 8% for first-time stock or bond investors, potentially indicating that there is a “social element to cryptocurrency investing not evident in stocks or bonds,” according to FINRA.
However, the ability to “start small” was the second biggest reason to jump into the 24% crypto market, similar to investors in stocks and bonds.
Meanwhile, according to the survey, about 10% of respondents indicated that the fear of missing out (FOMO) “potentially profitable investment opportunity” led them to buy cryptocurrency for the first time.
The survey also showed that 48% of cryptocurrency investors said they get digital asset market information from friends, family, or co-workers — compared to 35% among equity investors, followed by social media at 25%.
The survey also showed that new crypto investors were on average younger (37 years old) and had less college education (28.5% had completed four years of study) compared to stock investors (43 years old and 46.3% with a college degree).
Related: Cryptocurrency becomes second most widely used asset class for young women: eToro survey
Interestingly, the study found that digital asset owners did not know as much about cryptocurrencies as they initially thought.
Investors in digital assets scored 26.6% in a five-point quiz that asked questions about how cryptocurrencies are issued; converted to US dollars; how it is taxed; and how transactions can be “susceptible” to fraud.
The 465 participants interviewed on September 9 and 29 were randomly selected from US households. The error was 6.75%. The 2022 survey was part of a follow-up 2020 survey.