Retail Investors Remain Confident Despite 2022 Crypto Market Downturn, Survey Shows

The social trading platform eToro recently conducted a survey that revealed that a significant majority of retail investors, around 69%, have a positive or neutral outlook on the crypto market despite the prolonged bearish trend experienced in the previous year.

According to the research, it was discovered that a demographic of investors who are relatively new to the market, specifically those who are younger, tend to exhibit less apprehension towards the crypto market in comparison to the more experienced investors, despite the market downturn of 2022.

Crypto Downturn Fails to Deter Investors

Despite the crypto market’s bearish trend, which could be considered as one of the most severe in the history of digital assets, a majority of retail investors still express strong interest in various forms of digital assets. This is indicative of a growing optimism and belief in the long-term potential of the crypto market among retail investors.

The research revealed that a significant majority of retail investors, around 69%, have a positive or neutral outlook on the crypto market despite the severe  crypto winter witnessed

On the other hand, 31% of retail investors are more cautious about investing after the market crash. This suggests that while the market downturn may have affected some investors’ sentiment, it has not deterred the majority from considering digital assets as a viable investment opportunity.

In response to the increased interest from these investors, Global Markets Strategist at eToro Ben Laidler, explained that, that the majority of retail investors, around two-thirds, having a neutral or positive outlook on the crypto market even after experiencing one of the worst years in recent history may seem unusual. 

However, he continued, this is they tend to think long term. For those who have this investment strategy, the latter half of 2022 allowed them to purchase digital assets at lower prices, thereby enhancing the potential for the returns on the long run.

The survey report, which was based on responses from 10,000 retail investors from various countries and continents worldwide, found that the primary factor that has contributed to the resurgence of confidence among retail investors in crypto investing is the decreasing concern regarding inflation.

As investors became increasingly worried about the potential impact of rising inflation on traditional investments, many have turned to digital assets as an alternative store of value, as they are seen as a hedge against inflation.

Threat of Rising Inflation Among Others

The research discovered that by the end of the September 2022, a considerable proportion of retail investors, considered the perceived threat of inflation as the single most significant risk to their investment portfolios.

This highlights the growing concern among investors about the potential impact of rising inflation on traditional investments, and how this has led many to explore alternative investment options, such as digital assets, as a means of protecting their wealth.

However, by the end of last year, the worry about inflation among retail investors had decreased to 19%. Meanwhile, a significant percentage of retail investors, around 22%, identified the ongoing recession as the primary threat to their portfolios as they look forward to 2023.

The research also revealed that the level of apprehension towards the market differs among different age groups of retail investors. Younger investors, aged between 18-34, seem to be the least fearful of the cryptocurrency market, with around 76% expressing optimistic or indifferent entiments about the market’s downtrend.

On the other hand, older investors, aged 55 and above, who are closer to retirement, tend to be more hesitant about the crypto market, with only 60% expressing similar positive or neutral sentiments. This suggests that older investors may be more risk-averse and may prefer to invest in more traditional assets.

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