Friends and FOMO pushed newbie investors to buy crypto in 2022 — Survey

According to a poll conducted by a US financial regulator, friends’ influence and the fear of missing out (FOMO) were among the reasons investors purchased cryptocurrency for the first time in 2022.

The poll, published in late April by the United States Financial Industry Regulatory Authority (FINRA) Investor Education Foundation, discovered that a considerable fraction (31%) of new cryptocurrency investors claimed “friend suggestion” as the key reason for their entrance into cryptocurrencies. 

This compares to just 8% for first-time stocks or bond investors, suggesting that there is “a social element to cryptocurrency investing that is not evident in equities or bond investing,” according to FINRA.

However, the ability to “start with small amounts” was the second most important reason for entering the crypto market, accounting for 24%, similar to equities and bond investors. 

Meanwhile, according to the survey, 10% of respondents said a fear of missing out (FOMO) on a “potentially lucrative investment opportunity” motivated them to buy cryptocurrency for the first time.

to the report, 48% of crypto investors got knowledge about the digital asset market through friends, family, or coworkers, compared to 35% of stock investors and 25% via social media.

According to the poll, newer crypto investors were somewhat younger (37 years old) and less college-educated (28.5% finished a four-year degree) than stock investors (43 years old and 46.3% with a college degree).

Surprisingly, the survey discovered that digital asset owners did not know as much about cryptocurrencies as they expected. Investors in digital assets scored 26.6% on a five-item  that questioned how a cryptocurrency is produced, transferred into US dollars, taxed, and how transactions may be “susceptible” to fraud.

The 465 people polled between September 9 and 29 were chosen at random from U.S. homes. The error margin was 6.75%. The poll from 2022 was part of a follow-up study from 2020.