Lack of Widespread Crypto Knowledge Could be Stunting the Market’s Growth
2018 has been a rough year for the crypto markets, with Bitcoin, the market’s largest digital asset by market cap, falling from highs of nearly $20,000 one year ago to recently established lows of just over $3,000. The tumultuous market conditions throughout 2018 have disheartened many investors and has led the industry as a whole to ponder what could help drive an influx of fresh capital into the markets.
The results of a recently conducted survey from the Europe-based online trading platform, eToro, signals that the lack of knowledge about cryptocurrencies and how to acquire them may be acting as a huge barrier to many traditional investors.
Investors Still Incredibly Interested About Crypto, Despite Market Crash
The 2018 market crash inevitably led to an influx of negative news from mainstream media outlets, with reports titled “Bitcoin is Dead” frequently plaguing the crypto news cycle. Despite this, the results of eToro’s survey signals that the “FUD” from traditional news outlets hasn’t dissuaded traditional retail investors against being interested in the crypto markets.
Of the 1,000 respondents to the survey, 69% of those who are not already invested in cryptocurrencies claimed that they are either interested or very interested in learning about the markets and the technologies.
Guy Hirsch, the U.S. managing director at eToro, spoke about the results of the survey, noting that there is still a sense of “FOMO” (fear of missing out) amongst investors who have not yet entered the crypto markets.
“People still associate crypto with something that can generate alpha. In one sense people have FOMO (fear of missing out) if there is ever another rally and on the other hand people want to understand how they can do it,” he said.
Lack of Education a Huge Barrier for Entering Cryptocurrency Markets
Additionally, of the surveyed investors who are not currently invested in the crypto markets, three quarters claimed that they simply lack enough knowledge about the markets and technology in order to invest. This lack of knowledge wasn’t exclusive to those who hadn’t invested in the nascent markets, with one-fifth of current crypto investors claiming that even they don’t have adequate information about their investments.
Hirsch further explained that there is a huge demand for advice from registered investment advisors that is currently going untapped.
“There’s a huge demand that is not currently being satisfied to get advice from registered investment advisors about how to get into this asset class. There’s an untapped opportunity that is currently out there for companies and advisors to leverage,” he explained.
Furthermore, amongst millennial investors that don’t currently own any digital assets, 40% claimed that their lack of knowledge about cryptocurrencies, and how to acquire them, was directly stopping them from taking the leap to enter the markets. 44% of all respondents to the survey echoed a similar sentiment.
Although there are ample resources online that can offer neophyte investors knowledge about the cryptocurrency markets, 73% of millennial investors claimed that they’d be significantly more inclined to invest in crypto if they received the advice from an advisor.
“It’s very encouraging to see that millennials are in favor of using financial advisors. This makes sense as the top of the millennial generation is approaching 40 and is starting to accumulate a significant amount of wealth and are looking at their investments over the long term,” Hirsch said.
As cryptocurrency’s accessibility increases with the advent of new exchange features that simplify the buying process, and as traditional financial advisors become more willing to discuss digital assets as investment opportunities, it is likely that the markets will grow significantly.
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