Growth of Cryptocurrency Ownership Among Small Investors

Despite market fluctuations over the past four years, the number of small investors owning cryptocurrencies continues to rise. According to the International Organization of Securities Commissions (IOSCO), since 2020, there has been a significant increase in cryptocurrency ownership among small investors, leading to calls for improved investor education in this area.

High Percentage of Small Investors Own Cryptocurrencies

According to the IOSCO report from October 9, 15 out of 24 surveyed jurisdictions stated that up to 10% or more of retail investors owned cryptocurrencies last year. Additionally, six of these jurisdictions reported that 30% or more of small investors hold cryptocurrencies. This represents a sharp rise compared to 2020, when most jurisdictions estimated that only 1% to 5% of investors owned cryptocurrencies.

Crypto Assets Continue to Evolve

Since 2020, the crypto market has continued to evolve, despite the significant volatility it experienced during the so-called crypto winter in 2022. However, this has not deterred small investors from developed and emerging economies from continuing to invest in #Cryptocurrencies .

Increase in crypto ownership by jurisdiction over the past four years. Source: IOSCO

Risks and Challenges in the Crypto Market

IOSCO highlights the ongoing risks associated with cryptocurrency market volatility, insufficient investor understanding, lack of regulation, and frequent fraud. These concerns are consistent with those outlined in the 2020 report.

The Need for Better Investor Protection

The report also emphasizes the growing risks and challenges in the crypto market since 2020, including significant failures and bankruptcies, a prolonged bear market with a 73% drop from previous market highs, and an increase in fraud, hacks, and investor losses. IOSCO stresses the need for stronger investor protections and better educational measures.

Sustained Interest of Small Investors in Cryptocurrencies

Despite these challenges, small investors remain active in the cryptocurrency space. IOSCO notes that over the past four years, surveys and studies have consistently shown increasing interest in cryptocurrencies, especially among younger investors.

Profile of the Small Investor

Small investors who purchase cryptocurrencies tend to be younger, often under 40, with men being the predominant demographic. For example, in the United States, nearly 60% of investors under the age of 35 considered investing in cryptocurrencies, and more than half had already invested. Among Generation Z (ages 18 to 25), around 44% of investors began their investment journey with cryptocurrencies.

New Investors More Inclined to Cryptocurrencies

According to IOSCO, new investors are more inclined to invest in cryptocurrencies compared to those who have been in the market longer. The main reasons for investing in cryptocurrencies are fear of missing out (FOMO), low entry costs, and advice from friends or social media.

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,,The information and views presented in this article are intended solely for educational purposes and should not be taken as investment advice in any situation. The content of these pages should not be regarded as financial, investment, or any other form of advice. We caution that investing in cryptocurrencies can be risky and may lead to financial losses.“