FOMO and Peer Pressure: Crypto’s Investment Recipe
The United States Financial Industry Regulatory Authority (FINRA) Investor Education Foundation recently conducted a study that unveiled social factors and the fear of missing out (FOMO) as the driving forces behind first-time cryptocurrency investments.
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The study, carried out in late April, indicated that friends' suggestions were the main motivator for 31% of new crypto investors, as opposed to a mere 8% for those venturing into equities or bonds for the first time.
Furthermore, the survey found that 24% of participants considered the option to invest small sums as an attractive aspect of entering the crypto sphere, a sentiment echoed by equities and bond investors. FOMO proved influential for 10% of the respondents, who confessed to feeling pressured to join the crypto bandwagon to avoid missing out on lucrative opportunities.
The research also highlighted that personal connections played a significant role in information dissemination, with 48% of crypto investors gathering information on digital assets from friends, family, or colleagues, as opposed to 35% of stock investors. Social media platforms trailed closely as the second most popular source of information at 25%.
Demographically, the study unveiled that the average age of new crypto investors was 37, with 28.5% holding a four-year degree. In comparison, stock investors had an average age of 43, with 46.3% possessing college degrees. Intriguingly, the results also showed that digital asset investors overestimated their knowledge of cryptocurrencies, scoring only 26.6% on a quiz covering various aspects of the digital asset world.
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