Additionally, ASIC found that around 25% of investors said crypto was their only investment holding. And crypto trading platforms have been one of the most popular trading venues after bank-owned platforms.
The research was conducted in late 2021, ahead of the downturn in crypto markets and amid heightened activity from retail investors.
“Despite changes in economic conditions since the study was conducted, activity in the retail market has generally increased this year compared to pre-pandemic levels,” ASIC said.
Crypto’s apparent popularity among retail investors has raised concerns from the regulator.
“We are concerned about the number of people surveyed who reported investing in unregulated, volatile cryptocurrency products,” ASIC President Joe Longo said in a press release.
“According to the survey, only 20% of cryptocurrency owners view their investment approach as ‘risk-on’, raising concerns that investors don’t understand the risks of this asset class,” he said.
“ASIC is also concerned that there is limited protection for cryptocurrency investments as they become increasingly mainstream and heavily advertised and promoted. There are strong arguments for cryptocurrency regulation to better protect investors,” he said. .
In addition to crypto’s popularity, the report found that retail investors use a variety of digital channels and social media platforms to find investment information, with 41% citing social media such as YouTube, Facebook, podcasts and “influencers” as included as a source and 34% rely on Google search.
“It’s encouraging to see more people, especially young investors, joining the market,” Longo said. “A third of all investors surveyed said they were ‘in it for the long term.'” However, half of those surveyed admitted that they invest in things because they don’t want to miss out.
“This, coupled with the speed and reach of more complex and opaque financial product and service offerings, and marketing and sales through digital channels, could expose investors to new risks or higher levels of existing risks,” he said.