Retail Investors Know Crypto Better Than Stocks or Bonds

According to a new study, retail investors find more traditional financial products like stocks and bonds to be more obtuse than cryptocurrencies.

While 29% of investors reported that they did not understand cryptocurrencies, nearly 40% said the same of stocks and bonds, according to a survey from the World Economic Forum (WEF). The privately-funded survey, conducted in collaboration with BNY Mellon and Accenture, included over 9,000 individuals across nine countries.

It revealed a growing generational divide, as 70% of retail investors are currently under 45 years of age. Although a majority said they were looking to build long-term wealth, another 40% of those surveyed had yet to invest because they did not know how to invest or found it too confusing.

“With global adoption and trading volumes of crypto rising substantially over the last few years, there has been a lot of buzz about it, which is likely influencing investors’ product awareness,” said WEF investing lead Meagan Andrews.”Less coverage of more traditional products, like stocks and bonds, may also have the opposite effect on awareness.”

It was the return of retail investors that caused cryptocurrency-related stocks to see inflows of nearly $1 billion dollars recently, according to a report from VandaTrack. Last month, Marathon Digital Holdings, Coinbase Global, and Riot Blockchain were among the most purchased assets Fidelity reported being traded on its platform.

The NYSE FactSet Global Blockchain Technologies Index was on track for its largest monthly gain since Feb 2021, while the Bloomberg Galaxy Crypto Index, which tracks the largest digital assets including Bitcoin, had risen about 35% since the beginning of the year. Meanwhile, half of the 20 best-performing U.S. exchange-traded funds (ETFs) since the end of June were crypto-related. “Retail traders are definitely surfacing here,” said Ed Moya, senior market analyst at Oanda Corp.