Survey finds that new investors were motivated by peer pressure and fear of missing out to invest in cryptocurrency in 2022.

New Crypto Investors Influenced by Friends and FOMO, Says FINRA Survey

According to a recent survey by the United States Financial Industry Regulatory Authority (FINRA) Investor Education Foundation, a significant number of new crypto investors were swayed by suggestions from friends, compared to equities or bond investors. The survey found that the primary reason for 31% of new cryptocurrency investors for their foray into crypto was “friend suggestion,” as compared to only 8% for first-time equities or bond investors. This suggests that there is a social element to cryptocurrency investing not evident in equities or bond investing. In addition to friend suggestions, the survey found that the ability to “start with small amounts” was the second-biggest reason for making a move into the crypto market at 24%, similar to equities and bond investors. Meanwhile, around 10% of respondents indicated a fear of missing out (FOMO) on a “potentially lucrative investment opportunity” led to them buying crypto for the first time. The survey also found that 48% of crypto investors sourced information about the digital asset market from friends, family, or work colleagues, followed by social media at 25%. Stock investors, on the other hand, relied less on personal connections and more on financial advisors and media outlets. The survey also revealed that newer crypto investors were younger on average (37 years old) and less college-educated (28.5% completed a four-year degree) compared to stock investors, who on average are 43 years old and 46.3% of whom have college degrees. Interestingly, the study found that digital asset owners didn’t know as much about cryptocurrencies as they initially thought. Digital asset investors scored 26.6% on a five-item quiz that asked questions about how a cryptocurrency is issued, transferred into U.S. dollars, how it is taxed, and how transactions may be “susceptible” to fraud. The 465 participants surveyed between September 9 and September 29 were randomly selected from U.S. households, with a margin of error of 6.75%. The 2022 survey was part of a follow-up survey from 2020.