A recent study by the Financial Industry Regulatory Authority indicates that US investors are showing less interest in purchasing cryptocurrency than they did previously, as their risk-taking behavior has diminished.
The proportion of crypto investors has remained stable at 27% from 2021 to 2024; however, the number of investors contemplating either buying additional crypto or making their first purchase has fallen to 26% in 2024, down from 33% in 2021, as reported by FINRA on Thursday.
The regulator found a decline in “high levels of investment risk” among investors, which decreased by four percentage points to 8% between 2021 and 2024. The most significant decrease was observed in investors under 35, whose risk tolerance fell by nine percentage points to 15%.
Investment in crypto usually rises during times of greater optimism in the broader economic landscape, but current uncertainties surrounding interest rates, inflation, and the economy appear to have led investors to favor perceived safer assets.
Crypto seen as risky yet vital for financial aspirations
Conducted from July to December 2024 with a sample of 2,861 US investors, along with a state-by-state online survey of 25,539 adults, FINRA’s study discovered that 66% of participants regarded crypto as a risky investment, an increase from 58% in 2021.
Nonetheless, a third of the investors expressed that substantial risks are necessary to achieve their financial objectives, increasing to 50% among respondents aged 35 and younger.
Approximately 13% of investors, which includes nearly a third of individuals under 25, reported engaging in purchases of meme stocks and other trending investments.
Related: Wall Street need not be squeamish about Bitcoin’s ups and downs: Pomp
Decline in new investor activity
The influx of new investors has also slowed compared to 2021, with only 8% of investors noting they entered the market in the past two years leading up to 2024, down from 21% in 2021.
“The wave of younger investors who entered the market during the early pandemic, as indicated in the 2021 NFCS, has reversed as the pandemic subsided, bringing the proportion of US adults under 35 who invest back to 2018 levels,” FINRA remarked.
Overall, FINRA’s findings indicate a “modest trend toward more cautious attitudes and behaviors” when compared to the 2021 survey.
Magazine: Big Questions: Did a time-traveling AI invent Bitcoin
