Despite displaying a lack of experience in investing and trading, most retail investors prefer allocating funds in different cryptocurrencies as their entry point.
The popular digital asset exchange Huobi Group has compiled a study exploring the investment profiles of cryptocurrency traders in emerging markets. It concluded that digital assets such as Bitcoin and Ethereum have become â€œthe first point of entry to financial management for many individuals.â€
The majority of theÂ surveyâ€™s participantsÂ came from Europe, Asia, Africa, and South America. The study concluded that most of them are relatively new to investing.
78% answered that their investment experience is less than a year, while only 17% said they had been actively trading or investing for five or more years.
â€œconsidering 73% of respondents were of prime working age (26-50 years old), age was not a major contributor to the low levels of prior investing experience.â€ According to the report.
Furthermore, most participants reaffirmed that cryptocurrencies are their preferable investment instruments with a sizeable difference compared to other markets.Â Equity trading is next with 30%, while other traditional products such as bonds, real estate, investment funds, and forex received less than a quarter of the answers.
Longer-Term Holders Stick With Bitcoin And Ethereum
The research revealed that most investors maintain short-term views on cryptocurrencies. 55% indicated that their horizon is less than a year. Only 13% aim for a more extended period (more than four years).
However, when it comes down to specific digital assets, the situation was somewhat different. Bitcoin and Ethereum investors appeared â€œmuch more likely to holdâ€ their coins for at least three years.
Interestingly, while most retail investors had answered that their annual income is relatively modest, their investment allocations in cryptocurrencies seemed quite significant.
â€œA majority (54%) report having an annual income of $10,000 or lower, and very few (13%) earn more than $50,000 per annum. Nearly half (49%) of the respondents plan to invest between 10 â€“ 30% of their annual income in digital assets, and almost 25% plans to allocate more than 30% of their income in crypto.â€
Vice President of Global Business at Huobi Group, Ciara Sun, commented that these findings:
â€œarenâ€™t surprising. They do solidify our belief that digital assets will continue playing a significant role in the future borderless economy and help drive global financial inclusion. As crypto becomes more accessible, it will become a gateway to other financial products and services, helping set a path to financial wellbeing.â€