There is a significant number of investors that are willing to put more money into cryptocurrencies than stocks.
Major Success for the Crypto Market
The crypto sector is exploding with new coins and new investors who are attracted to it day by day. For a better comprehension of the investment environment of crypto, Cardify analyzed the crypto investor trends and their growth.
Moreover, the market research company conducted a survey with over 1330 cryptocurrency investors, asking them about their investing experiences, their viewpoint on Altcoins as well as the danger that comes with the territory.
According to this survey, crypto investors invested an average of $263 into accounts dedicated to coins in September, which was higher than the average $250 they put into traditional brokerages.
The investment level, be it in cryptocurrencies or traditional investments keeps changing from time to time, explains the head of product as Cardify, Amber Foucault.
Last year investors were putting only 5% of the money into crypto, whereas now that has jumped to 25%, added Foucault.
In recent days, several volatile assets have hit new records. The crypto giant for example keeps hitting higher prices and there are bullish predictions about it from many people in the industry.
The key reason behind Bitcoin’s all-time high is the launch of the first-ever ETFs, which marked massive success from day one. On the other hand, other cryptocurrencies, such as Ethereum, XRP, and Cardano also witnessed positive price gains.
Favoring Cryptocurrency Over Stocks
Why the shift from traditional stocks to cryptocurrency? Well, the answer lies in investors who have just joined the market. About 70% of the survey participants have been in the trading industry for less than a year, as reported by Cardify.
It is interesting to note that the majority of these investors wouldn’t call themselves experts of digital coins as they have just entered the crypto industry.
Although they are willing to invest their money into different digital assets, they admit to their limited comprehension of the complex world of cryptocurrencies.
In the question that rates their understanding of the cryptocurrency, there were three options available: Moderate understanding, limited understanding, and strong understanding.
Almost half of them (49%) chose moderate understanding, stating that they are just starting to explore it; 37% chose limited understanding, agreeing that their only exposure to crypto is by word of mouth. Finally, only 15% of them chose strong understanding, which means that only the smallest number completely understand the value and its potential.
Such lack of full understatement of the digital asset does not scare them away from embracing this new and innovative market.
FOMO and the Influence of Social Media
The results were interesting to analyze and Foucalt did not spare the public from further comments. While a great number of people have little idea of what’s happening in the crypto sector they still get into it for different reasons. She mentions the main reasons being the influence of social media or big names like Elon Musk. People are afraid of missing out so they are quick to jump on board.
However, Foucault adds that it is perhaps frightening to have something as important as investments in the economy based on unstable reasons.
Instead of getting informed merely on social media, financial experts suggest that the new investors should invest some time also in getting properly educated on the subject. It is crucial to know what they are getting into, to take all the dangers of the volatile coins into consideration before investing.
If you find the cryptocurrency market thrilling but don’t know what is going on, consider learning about it, advises the president of Bone Fide Wealth in New York, Douglas Boneparth. It is a good chance to further broader your horizon with useful information, adds Boneparth.
Finally, investors don’t necessarily have to side only with one, be it cryptocurrency or stocks. A diversified portfolio consisting of both stocks and cryptocurrency is even more beneficial.
When investing, one should choose the safe assets for their money, however, cryptocurrency can be something extra that will bring even more gains, concludes Foucalt.