A recent study conducted by the Australian Securities Exchange (ASX) revealed that despite considering themselves more risk-averse, almost one-third of young Australian investors, specifically those aged 18 to 24, have invested in or traded cryptocurrencies in the past year. The study, undertaken by financial research firm Investment Trends, found that while 46% of young investors preferred stable returns, 31% of them had significant investments in cryptocurrencies.
Researchers attribute the younger generation’s interest in cryptocurrencies to their desire to do things differently from their parents and their tech-savviness, as many of the new investors who entered the market since 2020 are connected to social media and familiar with digital technologies.
The study revealed that the median holding of cryptocurrencies for young investors was $2,700, making up 6% of their total investment portfolio, which is twice the 3% allocation seen among other age groups. However, despite young investors holding the highest amount of crypto relative to their portfolios, it is the “wealth accumulators,” those aged 25 to 49, who own the majority (69%) of cryptocurrency investments. Investors aged 50 and above accounted for just 19% of overall crypto ownership.
While the study acknowledged the apparent financial conservatism of young investors, it also recognized the popularity of cryptocurrencies as an investment choice. It noted that 29% of intending investors, who currently do not invest, are considering some form of crypto investment within the next 12 months.
This ASX study marked the first inclusion of cryptocurrencies as an asset class, and it approached the subject with caution, stating that it is still debatable whether cryptocurrencies can become fully accepted in mainstream investing.
The study also highlighted potential challenges for the growth of crypto investments in the future, particularly the role of centralized exchanges. The recent legal actions by the United States Securities and Exchange Commission against major exchanges like Coinbase and Binance serve as examples of the regulatory challenges faced by centralized exchanges. In Australia, exchanges have also encountered difficulties, with Binance Australia suspending Australian dollar-denominated services due to regulatory pressure, and major banks like Westpac and Commonwealth Bank imposing restrictions on transactions with crypto exchanges.
The ASX report was based on an online survey conducted in November 2022, with responses from 5,519 Australian adults. Despite the cautionary approach, the study emphasized the continued popularity of cryptocurrencies among investors, highlighting the need for further exploration and understanding of this evolving asset class
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