The crypto ownership of retail investors has seen a major rise since 2020, according to a new report from the Board of the International Organization of Securities Commissions (IOSCO).
Released on October 9, the report highlights that 15 out of 24 surveyed jurisdictions reported up to 10% or more of their retail investors owning crypto in 2022. In six of those jurisdictions, the figure was as high as 30% or more. This is a sharp increase compared to 2020, when many jurisdictions saw just 1-5% crypto ownership among investors.
Despite the infamous “crypto winter” of 2022, which triggered market volatility and a significant downturn, retail investors from both advanced and emerging economies have continued to pour into the crypto space. The report emphasizes that investor interest in crypto assets has persisted despite numerous setbacks, including bankruptcies and market corrections.
Need for Education
Alongside the rise in retail adoption, IOSCO’s report pointed to heightened risks within the cryptocurrency market. These concerns range from market volatility and regulatory uncertainty to crypto scams and fraud targeting investors. While these issues were also raised in IOSCO’s 2020 report, the challenges have become even more pronounced with high-profile bankruptcies, hacks, and enforcement actions over the last four years.
In light of these growing risks, IOSCO is calling for greater efforts in investor protection and education. The organization stressed the importance of equipping investors with a deeper understanding of the crypto market, especially in light of complex products and the often speculative nature of digital assets.
Young and New Investors Lead the Charge
The report also delves into the demographics of retail investors who are driving the surge in crypto ownership. According to IOSCO, younger investors — typically under the age of 40 — are most likely to enter the crypto market, with males comprising a large portion of these new participants.
In the U.S., nearly 60% of investors under 35 have either considered or already invested in crypto, with the younger Gen Z cohort (ages 18-25) being particularly drawn to these assets.
The report attributes much of this crypto ownership to factors such as fear of missing out (FOMO), low barriers to entry, and influence from friends or social media. As newer investors continue to flock to the space, IOSCO emphasizes the urgent need for robust regulatory frameworks and enhanced investor education to navigate the complexities of the crypto market responsibly.
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