Survey Reveals Friends and FOMO Influence New Crypto Investors in 2022
A recent survey by the United States Financial Industry Regulatory Authority (FINRA) Investor Education Foundation has shed light on the reasons why people invested in cryptocurrency for the first time in 2022. The survey indicated that new crypto investors were swayed by their friends' suggestions and had a fear of missing out (FOMO) on potentially lucrative investments.
The survey found that a significant number of first-time cryptocurrency investors, around 31%, cited "friend suggestion" as their primary reason for investing. In contrast, only 8% of first-time equities or bond investors relied on their friends' suggestions. This difference could indicate a social element to cryptocurrency investing not evident in traditional investment markets.
Another reason that motivated people to invest in cryptocurrency for the first time was the ability to start with small amounts. Around 24% of respondents reported this as the reason behind their initial investment in digital assets, similar to the reasons provided by equities and bond investors.
Interestingly, around 10% of survey respondents cited FOMO as the reason for their initial cryptocurrency investment. This phenomenon highlights the perceived potential for significant returns on investment, especially for those who missed out on earlier opportunities.
The survey also revealed that new cryptocurrency investors were generally younger than traditional stock investors. They were also less educated, with only 28.5% completing a four-year degree, compared to 46.3% of stock investors.
Moreover, the survey found that cryptocurrency investors did not know as much about digital assets as they initially thought. Participants scored an average of 26.6% on a five-item quiz that tested their knowledge about how cryptocurrencies are issued, transferred into U.S. dollars, taxed, and susceptible to fraud.
In conclusion, the survey's findings highlight the impact of social networks and FOMO on the cryptocurrency market. While many investors were motivated by their friends' suggestions or the potential for high returns, it is essential to note that a lack of knowledge could lead to significant losses. Therefore, it is crucial to research and educate oneself before investing in cryptocurrencies or any other financial market.