Friends and FOMO Pushed Newbie Investors to Buy Crypto in 2022 — Survey

Peer pressure and the fear of missing out (FOMO) were some of the reasons why investors bought crypto for the first time in 2022, according to a survey by a US financial regulator.

Published by the United States Financial Industry Regulatory Authority (FINRA) Investor Education Foundation in late April, the survey found that a large portion (31%) of new cryptocurrency investors cited “friend suggestions” as the primary reason for their foray into crypto.

This compares to just 8% for first-time stock or bond investors, potentially indicating that there is “a social element to cryptocurrency investing that is not evident in stock or bond investing,” according to FINRA.

However, the ability to “start small” was the second biggest reason for entering the crypto market at 24%, along with stock and bond investors.

Meanwhile, around 10% of respondents indicated that a fear of missing out (FOMO) on a “potentially lucrative investment opportunity” led them to buy crypto for the first time, according to the survey.

The survey also found that 48% of crypto investors said they sourced information about the digital asset market from friends, family or work colleagues – compared to 35% for equity investors – followed by social media at 25%.

The survey also found that newer crypto investors were somewhat younger on average (37 years old) and less college educated (28.5% completed a four-year degree) compared to stock investors, who are 43 years old on average and 46.3% of them. have college degrees.

Related: Crypto becomes second most popular asset class for young women: eToro survey

Interestingly, the study found that digital asset owners did not know as much about cryptocurrencies as they first thought.

Digital asset investors scored 26.6% on a five-item quiz that asked questions about how a cryptocurrency is issued; transferred to US dollars; how it is taxed; and how transactions may be “susceptible” to fraud.

The 465 participants surveyed between September 9 and September 29 were randomly selected from American households. The margin of error was 6.75%. The 2022 survey was part of a follow-up survey from 2020.

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