Retail investors increasingly buying crypto despite volatility: IOSCO

Crypto ownership has significantly increased among retail investors since 2020, says the Board of the International Organization of Securities Commissions (IOSCO), which called for more investor education about the space.

Fifteen out of 24 surveyed jurisdictions reported up to 10% or more of retail investors owned crypto last year, while six jurisdictions reported up to 30% or more crypto ownership, according to an Oct. 9 IOSCO report.

It’s a steep increase from 2020 when half of the responding jurisdictions estimated between 1% to 5% or less of investors owned crypto.

“Since 2020, the crypto-asset space has continued to evolve,” IOSCO wrote. 

“Despite volatility in the market, which experienced a major downturn during the 2022 ‘crypto winter,’ retail investors, in both advanced economies and emerging market jurisdictions, continue to invest in the crypto-asset market,” it added.

IOSCO said there are still risks and concerns over crypto market volatility, lack of investor understanding, lack of regulations, and scams and fraud.

These concerns remained similar to those identified in the 2020 report, it noted.

The report also highlighted the increased risks and challenges in the crypto market since 2020, emphasizing the need for stronger investor protection and education measures.

Over the past four years, there have been several high-profile failures and bankruptcies, a long bear market with markets plunging 73% from their previous highs, and a surge in scams, hacks, and investor losses — all alongside increased regulatory and enforcement actions in the crypto space.

Despite this, retail investors remain keen on crypto assets, IOSCO said.

“Over the last four years, numerous surveys, studies, and reports have found increasing interest by investors, particularly new investors, in crypto-assets.”

Retail investors who have bought crypto tend to be younger — typically under 40 years old — and male, the report noted.

Related: SEC crypto ‘overreach’ cost small investors $15B: John Deaton

In the United States, for example, nearly three in five investors under 35 years old considered a crypto investment, while over half had already invested.

Around 44% of the Gen Z cohort in America — 18 to 25-year-olds— started by investing in crypto, the report said.

New to the scene investors are also more likely to invest in crypto, compared to established investors, IOSCO noted. 

IOSCO’s report cited the main motivations for investing in crypto as fear of missing out (FOMO) or speculation, low cost of entry, and advice from friends and social media.

Magazine: Anti-aging tycoon Bryan Johnson almost devoted his life to crypto