U.S. Investors View Crypto with More Caution, Finds FINRA Study

Summary: A recent study by the Financial Industry Regulatory Authority (FINRA) reveals a significant shift in the attitudes of U.S. investors towards cryptocurrency, highlighting a decline in risk-taking behavior. While the proportion of crypto investors remains steady, fewer individuals are considering investing in crypto.

Key Takeaways

The percentage of U.S. investors involved in crypto has stayed constant at 27% from 2021 to 2024.
Interest in buying more crypto or investing for the first time has fallen from 33% in 2021 to 26% in 2024.
Investors categorizing themselves as taking “high levels of investment risk” dropped from 12% in 2021 to 8% in 2024, particularly among younger investors.
A majority view crypto as risky, yet many believe significant risks are necessary to achieve financial goals.

US investors consider crypto less as risk-taking drops: FINRA study

Decline in Crypto Interest Amid Shifting Investment Attitudes

According to the latest findings from the Financial Industry Regulatory Authority (FINRA), U.S. investors are now less inclined to consider cryptocurrency investments than in the past, primarily due to a decrease in risk-taking behavior. The percentage of individuals owning cryptocurrency remained unchanged at 27% between 2021 and 2024. However, the number of those contemplating further purchases or initial investments has decreased from 33% in 2021 to just 26% in 2024.

The regulatory body noted a decline in the number of investors identifying as engaging in “high levels of investment risk,” which fell four percentage points to 8% from 2021 to 2024. The sharpest decrease was observed among younger investors aged under 35, where this figure dropped by nine percentage points to 15%.

People investing in crypto has been steady since the last study in 2024, but the number of investors considering adding it to their portfolios has decreased. Source: FINRA

Historically, investments in crypto tend to increase during optimistic economic times. However, ongoing uncertainty regarding interest rates, inflation, and the economy has likely pushed many investors toward safer asset classes.

Crypto - Risky Yet Integral for Financial Aspirations

The FINRA study, which surveyed 2,861 U.S. investors and included a broader online poll of 25,539 adults, discovered that 66% of participants viewed crypto as a risky investment, an increase from 58% in 2021. Despite this, one-third of investors acknowledged that taking substantial risks is critical to achieving their financial objectives. This sentiment was even higher among individuals aged 35 and younger, with 50% agreeing on the necessity of risk.

Additionally, about 13% of investors, especially nearly one-third of those under 25, reported engaging in investments like meme stocks and other viral assets.

Related: Wall Street need not be squeamish about Bitcoin’s ups and downs: Pomp

Decrease in New Investors Joining the Market

Recent trends show a slowdown in the influx of new investors into the cryptocurrency market. Only 8% of participants reported entering the market in the last two years leading up to 2024, a stark decline from 21% in 2021.

According to FINRA, “The surge of younger investors who entered the market early in the pandemic, as reported in the 2021 National Financial Capability Study (NFCS), has reversed as the pandemic subsided, bringing the proportion of U.S. adults under 35 investing back down to 2018 levels.”

Overall, the findings suggest a slight shift towards more cautious investment attitudes and behaviors compared to the 2021 survey.

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The evolving landscape of cryptocurrency investment continues to warrant close attention as risk perceptions and economic conditions shape investor behavior.