The increasing popularity of cryptocurrencies among retail investors has become evident since 2020, according to a recent report by the Board of the International Organization of Securities Commissions (IOSCO). The findings indicate that in 2022, 15 out of 24 surveyed jurisdictions revealed that over 10% of retail investors owned cryptocurrencies, with six jurisdictions noting ownership levels of 30% or more. This marks a significant rise compared to 2020 when half of the jurisdictions reported that only 1% to 5% of investors were involved in the crypto market.
The landscape of crypto-assets has evolved substantially over the past few years, despite the inherent market volatility and challenges faced during the 2022 downturn known as the “crypto winter.” IOSCO observed that retail investors from both advanced economies and emerging markets continue to actively engage in cryptocurrency investments. However, the organization highlighted ongoing concerns regarding market volatility, a general lack of understanding among investors, insufficient regulatory frameworks, as well as risks associated with scams and fraud.
Since 2020, the crypto market has witnessed numerous high-profile failures, widespread bankruptcies, and a protracted bear market that saw asset values decrease by up to 73% from their peaks. This tumultuous environment, compounded with a rise in fraudulent activities, underscores the urgency for improved investor protection and educational initiatives. Despite these challenges, interest in cryptocurrencies remains strong, particularly among new investors.
Additional insights from the report reveal that younger individuals, predominantly under the age of 40, are more inclined to invest in crypto. For instance, in the United States, nearly 60% of investors under 35 expressed an interest in cryptocurrencies, with over half already having made investments. Among the Gen Z demographic (ages 18 to 25), approximately 44% reported initiating their investment journeys with crypto. The motivations driving these investments include fears of missing out, the perceived low cost of entry, and influences from social interactions and online platforms.
