Retail investors perceive stocks, bonds as more mysterious than crypto research

A representation of cryptocurrencies in this illustration taken on January 24, 2022. REUTERS/Dado Ruvic/Illustration

Aug 4 (Reuters) – Retail investors find well-established stock and bond markets more mysterious than the wild world of cryptocurrencies, a survey by the World Economic Forum (WEF) showed on Thursday.

The privately funded WEF’s survey, in partnership with BNY Mellon and Accenture, found that 29% of investors said they did not understand the nascent cryptocurrency market, while nearly 40% of investors noted that they did not understand stocks or bonds.

The survey also showed that 70% of retail investors were under 45 years of age.

“With global adoption and trading volume of crypto increasing significantly in recent years, there has been a lot of buzz about it, which is likely to influence investors’ product awareness,” said Meagan Andrews, head of investment at WEF.

“Less coverage of more traditional products, such as stocks and bonds, can also have the opposite effect on awareness.”

The cryptocurrency market cap rose to as much as $3 trillion last year, according to data platform CoinMarketCap.com, but it has lost nearly two-thirds of its value due to rising inflation and tightening economic conditions.

However, the crypto market’s peak was minuscule compared to the $124.4 trillion global stock market and the even larger $126.9 trillion bond market in 2021, according to the Securities Industry and Financial Markets Association.

The survey comes as retail investors become a force to be reckoned with after they united on social media forums last year to drive eye-popping rallies in GameStop ( GME.N ) and pressured bearish hedge funds.

A Gallup poll published in May found that 58% of Americans said they own stocks.

The WEF survey of more than 9,000 individuals in nine countries also showed that a majority of investors were looking to build long-term wealth.

But about 40% of respondents did not invest, saying they did so because they did not know how to invest or found investing too confusing.

Reporting by Medha Singh in Bengaluru; editing by Uttaresh.V

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