Photo by Aaron Burden via Unsplash with Bitcoin in the edit by Cointimes.
The study concluded that younger retail investors are less afraid of the crypto market after last year’s crash.
Most retail investors, i.e. small investors, are still very interested in investing in digital assets despite going through what is arguably the worst bear market in crypto history.
According to a research report from the eToro platform, more than two-thirds, approximately 69%, of retail investors revealed that they are optimistic or have mixed feelings about the impact of the prolonged market downturn experienced last year. The remaining third, approximately 31%, said they were unsure about investing in the sector after the collapse.
Commenting on this renewed interest from retail investors, eToro Global Markets Strategist Ben Laidler said:
“The fact that two-thirds of retail investors feel indifferent, or even more positive, after the worst year for markets may seem strange. But most of this group thinks in years and decades. For those with longer time horizons, the end of 2022 offered a chance to buy lower, improving long-term return prospects.”
Retail investor confidence returns
The report, which surveyed 10,000 retail investors from 13 countries and three continents, revealed that the biggest driver of renewed investor confidence in the crypto industry is the fading fear of the threat of high inflation among investors.
The study concluded that, at the end of Q3 2022, around 24% of retail investors considered the perceived threat of inflation the biggest risk to their investment portfolios.
However, by the end of 2022, concerns about inflation had dropped to 19%, while around 22% of respondents cited the global recession as the main threat to their investment portfolios moving into 2023.
As a result, many investors are adjusting their portfolios, with the cash allocation rising to 50% and adding safer assets like healthcare and utilities.
The survey also found that younger investors have the least fear within the crypto market, while older investors are more reluctant.
Around 76% of young retail investors aged 18-34 feel bullish or indifferent about the downtrend, while just 60% of investors over 55 feel the same about the crypto market.