Friends and FOMO pushed newbie investors to buy crypto in 2022 — Survey

Impact from friends and the worry of missing out (FOMO) were a few of the factors investors bought crypto for the very first time in 2022, according to a survey by a United States financial regulator. Published by the United States Financial Industry Regulatory Authority (FINRA) Investor Education Foundation in late April, the study found that a big part (31%) of new cryptocurrency investors mentioned “friend tip” as the main factor for their foray into crypto. This is compared to only 8% for newbie equities or bond financiers, potentially suggesting that there is “a social element to cryptocurrency investing not evident in equities or bond investing,” according to FINRA.However, the capability to “start with small quantities” was the second biggest reason for making a move into the crypto market at 24%, similar to equities and bond investors. Buddies are having a considerable influence on crypto newbies getting in the market. Source: FINRAMeanwhile, around 10% of participants indicated a fear of losing out (FOMO) on a “possibly profitable financial investment chance” led to them buying crypto for the very first time, according to the survey.The study also discovered that 48% of crypto investors said they sourced info about the digital property market from pals, household or work coworkers– compared to 35% for stock financiers– followed by social networks at 25%. Many crypto newbies are learning more about the crypto market from social media. Source: FINRAThe study also found that more recent crypto financiers were slighter younger typically (37 years of ages) and less college-educated (28.5% completed a four-year degree) compared to stock financiers (43 years of ages and 46.3% with college degrees). Related: Crypto ends up being second most widely-owned possession class for girls: eToro surveyInterestingly, the study discovered that digital possession owners didnt referred to as much about cryptocurrencies as they at first thought.Digital property financiers scored 26.6% on a five-item test that asked questions about how a cryptocurrency is issued; transferred into U.S. dollars; how it is taxed; and how transactions might be “prone” to fraud.The 465 individuals surveyed on Sept. 9 and 29 were randomly picked from U.S. families. The margin of error was 6.75%. The 2022 survey was part of a follow up survey from 2020. Publication: Magazine: Crypto winter can take a toll on hodlers psychological health

Other Questions People Ask

What role did friends play in pushing newbie investors to buy crypto in 2022 according to the survey?

The survey revealed that a significant 31% of new cryptocurrency investors cited "friend tip" as their primary motivation for entering the crypto market in 2022. This indicates that social influences are particularly strong in cryptocurrency investing, more so than in traditional equities or bonds. The findings suggest that friends not only provide encouragement but also serve as a key source of information for those new to the crypto space.

How did FOMO influence newbie investors to buy crypto in 2022 according to the survey?

Fear of missing out (FOMO) was a notable factor for approximately 10% of participants who bought crypto for the first time in 2022. This sentiment reflects a broader trend where potential investors feel pressured to act quickly on what they perceive as lucrative opportunities. The survey highlights that FOMO can drive individuals to make investment decisions without fully understanding the market, which can be risky.

What demographic trends were observed among newbie crypto investors in 2022?

The survey indicated that newer crypto investors were generally younger, with an average age of 37, compared to older stock investors averaging 43 years. Additionally, only 28.5% of these new crypto investors had completed a four-year college degree, which is lower than their stock-investing counterparts. This demographic insight suggests that the appeal of cryptocurrency may resonate more with younger, less formally educated individuals, potentially due to its innovative and accessible nature.

How did social media impact the decision of newbie investors to buy crypto in 2022?

According to the survey, around 25% of new cryptocurrency investors sourced their information about the digital asset market from social media platforms. This reliance on social media indicates a shift in how potential investors gather information and make decisions, often influenced by trends and discussions happening online. The findings suggest that social media plays a crucial role in shaping perceptions and driving interest in cryptocurrency among new investors.

What did the survey reveal about the knowledge level of new crypto investors in 2022?

The survey found that new digital asset owners scored only 26.6% on a test assessing their understanding of key cryptocurrency concepts. This low score indicates that many investors may not possess a solid grasp of how cryptocurrencies function, including aspects like issuance and taxation. The results highlight the importance of education and informed decision-making in the rapidly evolving crypto market, especially for those entering it based on social influences.