US investors are showing less interest in buying crypto than before, as a recent study by the Financial Industry Regulatory Authority indicates a decline in risk-taking behavior.
The proportion of crypto investors remained steady at 27% between 2021 and 2024, but those considering increasing their investments or buying for the first time fell to 26% in 2024 from 33% in 2021, according to a report released by FINRA on Thursday.
The regulator discovered that the percentage of those with “high levels of investment risk” dropped four percentage points to 8% from 2021 to 2024, with the largest decline among investors under 35, which decreased by nine percentage points to 15%.
Investment in crypto typically rises during periods of optimism in the broader macroeconomic landscape, but uncertainties regarding interest rates, inflation, and the economy have likely prompted investors to seek safer assets.
Crypto regarded as risky yet vital for financial objectives
FINRA’s research conducted from July to December 2024 involved 2,861 US investors and an extensive online survey of 25,539 adults across states. It revealed that 66% of participants viewed crypto as risky, a rise from 58% in 2021.
Nevertheless, a third of investors expressed the belief that significant risks are necessary to achieve their financial ambitions, with that figure climbing to 50% among those aged 35 and below.
Around 13% of investors, including nearly one-third of individuals under 25, indicated they had invested in meme stocks and other viral trends.
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Decline in new investor activity
The influx of new investors has also slowed compared to 2021, with only 8% reporting they entered the market in the last two years leading up to 2024, down from 21% in 2021.
“The wave of younger investors who joined the market early during the pandemic, as noted in the 2021 NFCS, reversed direction as the pandemic subsided, bringing the proportion of US adults under 35 participating in investing back to 2018 levels,” stated FINRA.
Overall, FINRA’s findings suggest a “modest trend toward more cautious attitudes and behaviors” when compared to the 2021 survey.
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