Crypto Investment Drops Among US Investors Amid Economic Uncertainties
The Financial Industry Regulatory Authority (FINRA) has recently conducted a survey revealing that the enthusiasm for cryptocurrency investing among United States investors has dwindled over time. According to their findings, the risk-taking behavior among investors has substantially decreased compared to previous years.
A Shift in Investment Behavior
The same percentage (27%) of investors pursued cryptocurrency investments between 2021 and 2024. However, there was a noticeable reduction in the number of investors contemplating additional purchases or first-time buying. This figure plummeted to 26% in 2024 from the level of 33% registered in 2021.
The study discovered that the investors who usually take high risks saw their own ranks decrease by four percent, down to 8%. Interestingly, the sharpest decline was noticed among the investors aged under 35, where it dwindled by nine percentage points, settling at 15%.
Link Between Crypto Investment and Macroeconomic Environment
The study also highlighted that investment in cryptocurrency typically experiences a surge during periods of extreme optimism in the broader macroeconomic landscape. However, the prevailing uncertainty over interest rates, the inflation rate, and the economy in general, has likely compelled the investors to pivot towards assets deemed to be safer.
Survey Details and Findings
The survey, held between July and December 2024, involved a comprehensive participation of 2,861 US investors. An online survey was also conducted across multiple states with 25,539 adult respondents. The study concluded that two-thirds or 66% of the surveyed population perceived cryptocurrency as a risky investment, marking an increase from the 58% recorded back in 2021.
On the flip side, one-third of respondents expressed the belief that taking considerable risks is essential to achieving their financial targets. This sentiment was more pronounced among the younger respondents under the age of 35, where it augmented to a sizeable 50%. Another intriguing finding was that 13% of respondents, incorporating approximately one-third of individuals under the age of 25, confessed to purchasing viral investments such as meme stocks.
Investment Pace and Attitude
There is a noticeable drop in the pace of investors entering the markets compared to 2021. Only 8% of investors admitted to venturing into the market in the last two years leading up to 2024, as opposed to 21% in 2021. An intriguing trend reversal was observed among younger investors who had penetrated the market early during the pandemic. As the pandemic ebbed, the participation of adults under 35 in investment activities regressed to the levels of 2018.
In summary, FINRA’s findings depict a cautious and pragmatic approach among investors vis-à-vis 2021, respecting their attitudes and behavior toward investment.
