Influence from friends and fear of missing out (FOMO) were among the reasons investors bought cryptocurrencies for the first time in 2022, according to a survey by a US financial regulator.
Published by the United States Financial Industry Regulatory Authority (FINRA) Investor Education Foundation in late April, the survey found that a large portion (31%) of new cryptocurrency investors cited a “friend suggestion” as the main reason for their foray into cryptocurrency.
This is compared to only 8% for first-time stock or bond investors, which may indicate a “social component to investing in cryptocurrencies that is not evident in stocks or investing in bonds,” according to FINRA.
However, the ability to “start small” was the second biggest reason for moving into the cryptocurrency market at 24%, similar to stock and bond investors.
Meanwhile, about 10% of respondents cited fear of missing out (FOMO) as a “potentially profitable investment opportunity” that led them to purchase cryptocurrencies for the first time, according to the survey.
The survey also found that 48% of cryptocurrency investors said they got information about the digital asset market from friends, family or co-workers – compared to 35% for stock investors – followed by social media at 25%.
The survey also found that new cryptocurrency investors were slightly younger on average (37 years old) and less college-educated (28.5% had completed a four-year degree) than stock investors (43 years old and 46.3% with college degrees).
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Interestingly, the study found that digital asset owners do not know as much about cryptocurrencies as they first thought.
Digital asset investors scored 26.6% on a five-item test that asked questions about how the cryptocurrency was issued; converted into US dollars; how it is taxed; and how transactions can be “vulnerable” to fraud.
465 participants were surveyed on September 9. 9 and 29 were randomly selected from US families. The error rate was 6.75%. The 2022 survey was part of a follow-up survey from 2020.
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